Transferring company pension

dunstonh

I don't accept that people should be frightened of ongoing investment decisions. Most pension products have very limited investment choice and even with a SIPP the selection of a few index trackers is very straightforward.

A selection of a few index trackers is not straightforward. There will be a need to rebalance. There are around 10 main sectors, so it will be at least 10 funds. You could run a global tracker to reduce that number but it would still involve around 5 funds. The average UK consumer is low knowedge, low risk and not able or willing to do things like that. It may be fine for someone able and willing but not mr or mrs Average.

As someone who has a defined benefit pension CETV of over 47 times annual pension I am personally frustrated that I can't get hold of it without extortionate fees and !!!! covering by IFAs.

Because statistically, 9 times out of 10 over the last 29 years, it would have been the wrong thing to do.

There are plenty of people who have wanted to do something, did it and then when it went wrong, they go looking for someone else to blame.

Maintaining growth in line with inflation should not be a problem for most and there would be considerable benefits.

Like any risk event, that may be the hope or expectation but it may not be the reality. When the risk events happen, people tend to look to blame others or get compensation out of someone.

mgdavid

bikeman wrote: »

I was being a bit flippant .......

it's all too easy to be flippant with someone else's £3/4 million pension but it's not necessarily in the OP's best interest.

jamesd

There's considerable research on safe withdrawal rates from pensions. These work out the highest income that could have been taken and still pay out for life even if the worst investment results since around the 1890s were repeated.

A now old fashioned rule suggests 4% if the pension pot value, increasing with inflation. £29,920 a year. In 96% of historic US cases the money value, not adjusted for inflation, would have been higher at the end than at the start.

The more modern Guyton-Klinger rules would suggest around 5.5% to 6% in exchange for being willing to skip inflation increases or take drops during sustained bad times. £41,140 a year. If you instead experience average or better results the income level can go up. These rules try not to leave so much money at the end.

Those numbers assume investment mixtures using at least 50% shares and roughly the same in company bonds and similar things.

Reduce those to three quarters if you take and spend the 25% tax free lump sum.

A spouse or other people you nominate would inherit the pension and income level and their beneficiaries inherit from them in turn.

Low interest rates today are often producing very attractive transfer values that reverse the traditional guidance not to transfer.

GDB2222

CURLYSANDY wrote: »

The Pension Advisor then stated that if I transfer my £700k pension pot to, say for example, The Prudential, ie a private pension scheme, then I can continue to draw a monthly pension, but then when I die my Pension Pot is still there and can then be inherited by my children.

This is highly emotive stuff. Nobody wants to lose £700k. But, really, it all depends on the figures, and Curly hasn't said how big her pension would be if she stayed with Centrica.