MetLife being recommended by IFA

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  • xylophone
    xylophone Posts: 44,433 Forumite
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    Post GMP is only £340

    But revaluing in deferment by fixed or full rate.

    https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/
  • System
    System Posts: 178,094 Community Admin
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    I misread the post as McLife, I thought McDonald's was doing finance!
  • xylophone
    xylophone Posts: 44,433 Forumite
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    I misread the post as McLife, I thought McDonald's was doing finance!

    Anything Ford can do Mac can do better?:D
  • RADDERS
    RADDERS Posts: 241 Forumite
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    xylophone wrote: »

    Just double checked my paperwork and it is £340 per annum, increasing before retirement 4.75% after retirement 5%
    Thanks again for any assistance
  • Malthusian
    Malthusian Posts: 10,943 Forumite
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    If I understand it correctly as long as I do not touch the pension (which at the present time we have no need to) the capital grows at a minimum of 3% per annum and there is a daily lockout on this product.

    If you don't touch the pension then 3% is a dire rate of return.

    For the up to 1.2% per annum MetLife charge for guarantees a woman aged 54 in good health could purchase guaranteed whole of life insurance of 77% of the investment, which barring an unprecedented stock market catastrophe will give you better security than MetLife will.

    The best you can say about MetLife is that if an adviser has tried to convince you that investment risk is a good thing, and been forced to admit defeat, by recommending one he avoids the risk that you complain when the stockmarket falls, and he also avoids the risk that you complain that he should have tried to convince you harder after you realise how much money you've lost by letting inflation eat away your savings. But there are much better solutions no matter what the problem is.
  • RADDERS
    RADDERS Posts: 241 Forumite
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    Thanks for all the helpful advice, I guess it's back to the IFA then and see what else she can recommend.
    Cheers Radders
  • xylophone
    xylophone Posts: 44,433 Forumite
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    Just double checked my paperwork and it is £340 per annum, increasing before retirement 4.75% after retirement 5%

    You have a statement showing post 88 GMP and excess.
    It seems that your GMP is revaluing in deferment by Fixed Rate and the excess by scheme/statutory rules - see

    https://www.barnett-waddingham.co.uk/comment-insight/blog/2012/07/24/revaluation-for-early-leavers/

    GMP age for a female is still 60,

    In payment, your Scheme has to index link the GMP portion up to 3% CPI and the excess according to scheme rules - what does your scheme booklet say about index linking the excess in payment? Is it CPI/RPI/ up to a maximum of 5% regardless of whether inflation is higher?

    Your IFA should be able to tell you.
  • RADDERS
    RADDERS Posts: 241 Forumite
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    xylophone wrote: »
    You have a statement showing post 88 GMP and excess.
    It seems that your GMP is revaluing in deferment by Fixed Rate and the excess by scheme/statutory rules - see

    https://www.barnett-waddingham.co.uk/comment-insight/blog/2012/07/24/revaluation-for-early-leavers/

    GMP age for a female is still 60,

    In payment, your Scheme has to index link the GMP portion up to 3% CPI and the excess according to scheme rules - what does your scheme booklet say about index linking the excess in payment? Is it CPI/RPI/ up to a maximum of 5% regardless of whether inflation is higher?

    Your IFA should be able to tell you.

    CPI upto a maximum of 2.5% post 1997 and CPI upto a maximum of 5% for the other before retirement.
    LPI to a maximum of 5% after retirement for everything.
    I have the paperwork but isn't that easy to understand lol
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    edited 9 June 2017 at 12:06PM
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    RADDERS wrote: »
    Thanks for all the helpful advice, I guess it's back to the IFA then and see what else she can recommend.
    Cheers Radders

    Fire the IFA. You received bad advice once so don't compound the mistake. If you want to avoid risk then the DB pension sounds just right. Is your DB pension index linked? Have you compared the internal rate of return of the DB plan and the MetLife option (including all fees) for an average lifespan.

    I't doesn't sound as if your husband will be in financial difficulty if you pre-decease him, but if you are worried about that I like the option of buying some straight no frills life insurance.

    You said you have savings.....how are they invested?
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • dunstonh
    dunstonh Posts: 116,389 Forumite
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    Fire the IFA. You received bad advice once so don't compound the mistake.

    How was the advice bad?
    If you want to avoid risk then the DB pension sounds just right and 3% minimum return is pretty good with no risk.

    Did you not read the comment about death benefits?
    but if you are worried about that I like the option of buying some straight no frills life insurance.
    That option would already have been costed and compared as part of the pension transfer process.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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