DB transfer value shock

Dark_Sunday

In my very 1st job I apparently had a DB pension which I had sort of forgotten about really. At 20 your not really interested in pensions that much are you ?

So now I'm in the swinging 50s & pensions are now something to take seriously, investigating further & to cut a long story short I was totally shocked this morning to receive this info:

Transfer Value: £91,732
Total GMP at age 65: £4,041

Need to think long & hard about what to do especially when I read about the very high fees IFAs appear to charge.

My instinct is to transfer the £91,732 to an alternative pension fund.

Any positive comments appreciated.

mgdavid

it depends:
- when do you wish to stop work?
- what other pension provision do you have?
- are you diverse with a mix of DB and DC pensions plus other savings and investments?
- are you likely to need lump sum(s) as part of your retirement planning?

Also:
- who is the DB pension with, are they financially very secure & sound, or does a review reveal any risk?

Dark_Sunday

Reasons for considering transfer to an alternative pension fund:
1. Company no longer exists, & hasn't for a very long time & pension fund is managed by a 3rd party. Will there be a fund when I retire ?
2. Flexibility on my actual retirement date & this chunk of money would have an influence
3. 25% tax free lump sum on retirement

Reason for stalling:
1. Being ripped off by having to pay a fee to an IFA for a decision I'm more than capable of making myself

I really find it quite incredulous that an IFA has to be involved with any DB scheme transfer over £30k. Surely the onus should be on the financial industry not to rip people off with bogus schemes & giving wrong advice that pays commission to greedy insurance salesmen.

The government has clearly got this wrong.

neilvw

Dark_Sunday wrote: »

I really find it quite incredulous that an IFA has to be involved with any DB scheme transfer over £30k. Surely the onus should be on the financial industry not to rip people off with bogus schemes & giving wrong advice that pays a greedy insurance salesman.

DB transfers are complicated and the IFA (or his insurer) is bearing considerable regulatory risk. So the onus is indeed on the IFA and hence he/she will charge accordingly.

Dark_Sunday

neilvw wrote: »

DB transfers are complicated and the IFA (or his insurer) is bearing considerable regulatory risk. So the onus is indeed on the IFA and hence he/she will charge accordingly.

Looks like lots of red tape & obstacles for someone looking for a DB transfer.

Basically the financial industry can't really be trusted & the government acknowledges this but at the end of the day punters have to pay the gravy train of IFAs if they want to transfer.

I know only 2 people who are IFAs. 1 was a butcher & the other a JCB driver. Each had a career change & best of luck to them, but I ain't giving them any money cos they're academically not too bright.

neilvw

More to the point, some consumers can't be trusted to do what's in their best interests without proper advice, which costs money.

Thrugelmir

Do you have a partner?

Dark_Sunday

neilvw wrote: »

More to the point, some consumers can't be trusted to do what's in their best interests without proper advice, which costs money.

I agree there has to be safeguards for ordinary people who do not know about financial intelligence & they should be protected from the financial industry that rips them off. But what about people who are financially intelligent ?

The onus should be on the sharks in the financial industry who have or who would rip people off. Because of them punters have to pay yet again.

Dark_Sunday

Thrugelmir wrote: »

Do you have a partner?

30 years married.

Thrugelmir

Then there'll be a dependents benefit as well to factor into your decision.

Stubod

..same dilemma as me....I have 3 "old/frozen" pensions, each worth between £2.5k and £3.5k / yr. but have been offered best part of £100k each to "transfer"....its very tempting, particularly as there is no index linking once I start taking them. From a dependents point of view I would assume better to take the money?...ie they would normally only get less than half per yr..