DB transfer value shock

Bazofts_Revenge

I would hold back transferring any DB fund until either the last possible moment, for my scheme it is 1 year before normal retirement age or two or three annual transfer requests quotes show no growth. I've been getting a quote every 12 months for the last few years, These figures are approximates (from Memory) £134k - 184k - £222k and this year £278k. Whilst the numbers been offered are increasing at £6k a month I will leave the DB where it is.

TESCOBABE56

Bazofts_Revenge wrote: »

I would hold back transferring any DB fund until either the last possible moment, for my scheme it is 1 year before normal retirement age or two or three annual transfer requests quotes show no growth. I've been getting a quote every 12 months for the last few years, These figures are approximates (from Memory) £134k - 184k - £222k and this year £278k. Whilst the numbers been offered are increasing at £6k a month I will leave the DB where it is.

Do you know why thosr transfer values changed?
I'll bet that £278k is lower now.

Silvertabby

I would hold back transferring any DB fund until either the last possible moment, for my scheme it is 1 year before normal retirement age or two or three annual transfer requests quotes show no growth. I've been getting a quote every 12 months for the last few years, These figures are approximates (from Memory) £134k - 184k - £222k and this year £278k. Whilst the numbers been offered are increasing at £6k a month I will leave the DB where it is. Posted by Bazofts

Transfer values are high at the moment because of their link to Government gilts. They are not guaranteed to carry on increasing and may even decrease.

davieg11

Bazofts_Revenge wrote: »

I would hold back transferring any DB fund until either the last possible moment, for my scheme it is 1 year before normal retirement age or two or three annual transfer requests quotes show no growth. I've been getting a quote every 12 months for the last few years, These figures are approximates (from Memory) £134k - 184k - £222k and this year £278k. Whilst the numbers been offered are increasing at £6k a month I will leave the DB where it is.

In 4 years time you could be back down to £134k. I'm taking mine while it is so high and investing in dc for another 20 years.

TESCOBABE56

Silvertabby wrote: »

Transfer values are high at the moment because of their link to Government gilts. They are not guaranteed to carry on increasing and may even decrease.

Correct.
In 2005 the transfer value of my deferred DB pension was £105k, today it is £478k down from a peak of £534k, it seems to change monthly,

Bazofts_Revenge

The 278k isn't down yet as I still have 2 months left to take it.

I know the value could drop hence my comment to check it once a year. To check it more regularly will cost about £150 for each quotation.

Once it drops or I am in the position where I want access I will then make the decision on what to do.

My whole point is that I would have been gutted to take the first quote.

Thrugelmir

TESCOBABE56 wrote: »

Correct.
In 2005 the transfer value of my deferred DB pension was £105k, today it is £478k down from a peak of £534k, it seems to change monthly,

There's many factors in play. The EU, the US, OPEC, China etc etc.

Economic events influencing gilt yields

The election of Donald Trump to US President in November has seen investors sell bonds and gilts increasing yields. The expectation is for higher infrastructure spending increasing inflation and the Federal Reserve raising interest rates.

In October 2016 a combination of factors is driving yields up to close at 1.61%, the highest level since the EU Referendum. Investors anticipate the Federal Reserve are likely to increase interest rates before the end of the year. The Bank of Japan and Europe Central Bank are reaching the limit of buying long-term government bonds and this is helping a selloff in bonds. OPEC are close to agreeing a deal to cut the supply of crude-oil which may see the price rise from the current level of $50 a barrel and this could push up inflation.

The 15-year gilt yields reached another all time low of 0.90% on 11 August 2016.

The Brexit vote has resulted in the 15-year gilt yields reducing by 52 basis points reaching an all time low of 1.41% on 30 June 2016. The governor of the Bank of England announced measures for a further £250 billion of Quantitative Easing (QE) should this be required and possible reduction in interest rates from the current all time low level of 0.5% since 2009.

Uncertainty over the 2016 EU Referendum and the possibility of a Brexit vote has seen investors seek the safe havens of bonds and gilts sending the prices higher and yields lower.

Dark_Sunday

Bazofts_Revenge wrote: »

I would hold back transferring any DB fund until either the last possible moment, for my scheme it is 1 year before normal retirement age or two or three annual transfer requests quotes show no growth. I've been getting a quote every 12 months for the last few years, These figures are approximates (from Memory) £134k - 184k - £222k and this year £278k. Whilst the numbers been offered are increasing at £6k a month I will leave the DB where it is.

Thanks indeed.

This is a fantastic post for me cos I'm 53 & don't really need to dive into anything. However I do want to transfer. Perhaps I'll ask for an updated CETV next year again & assess, but I'm so very very reluctant indeed to pay for IFA advice that I don't really need.

Bazofts_Revenge

I was quoted about £700 for an IFA assessment from a market leader about 8 years ago. Not sure what it would be now.

Dark_Sunday

After several weeks of in-depth research I've concluded that this DB debacle whereby you need to pay circa 3% to an IFA if you want to transfer to another pension fund is nothing short of a SCAM.

Many if not most pension companies appear to not accept a transfer unless an IFA advises that you should transfer. So if you have a DB CETV of say £200k & you know that you defo want to transfer it to another fund, you pay an IFA £6k but he /she advises not to transfer so you basically lose £6k.

Apparently only something like 1 in 10 IFAs conclude that a transfer from a DB scheme should proceed.

This is NOT right. In fact it's abhorrently wrong.