Another question on defined benefit transfer - where to find an honest IFA

rpc

What i find difficult to stomach is handing over 1% a year to an IFA

So find an IFA that will do this as a single transaction and not as part of ongoing servicing.

It cuts down your options a lot - dunstonh pointed out in the first reply that you are not looking to give the sort of business most IFAs are after.

Also remember that the IFA will carry liability for their advice far after you actually make the transfer. If you reach retirement in 15 years and your SIPP has crashed at the wrong time, your IFA is still on the hook if their advice isn't up to scratch.

Personally, my DB pension is the foundation of my retirement plans and it pushes up my risk tolerance in other investments. If it all goes well, I will have a lot of flexibility. If it goes wrong (or just a slump at the wrong time) then I still have a DB pension from 65 as a backstop.

Hitting the LTA at age 51 doesn't sound like particularly great tax planning...

Aretnap

If you do the transfer and your investment strategy goes to plan then you hit the lifetime allowance and end up paying a punitive tax rate.

If you do the transfer and your investment strategy doesn't go to plan then you miss out on the secure retirement that the DB pension offered you.

So I'm slightly struggling to see why any IFA would recommend that you transfer - it looks like an obvious mis-sale to my (unprofessional) eyes. That's before they even consider the merits of your investment strategy - and I have to agree that 4-fold growth over 10 years (about 14% annual) would probably strike them as a little, ahem, optimistic.

CFrog

You've been given lots of good advice but to add my 'tuppence' ...

I'm 58 and going through a DB transfer myself. I do however, already have a SIPP and another DB pension that I'm not touching. As Bravepants / others suggest, I too would probably leave your DB pension where it is as a bit of a 'comfort blanket' / fallback should things go sideways.

A few other random thoughts / observations:

- Do you really plan to work well into your 60's; if it's your choice, I think you're in a minority
- Without knowing the detail, unless you are planning to have an extravagant retirement, I would have thought that growth in your existing SIPP, your DB pension and any additional ISA savings made between now and 2032 should provide for a comfortable retirement. Do you have a target figure; do you know your 'number'?
- It took me a while to find an IFA who would consider looking at the transfer; not all firms will touch this business. You will just have to ring round or perhaps approach one of the larger firms (like Tideway?) who do this sort of work.
- The IFA will have to perform a TVAS calculation to assess the relative merits of transferring your DB pension but this would (in your case) have to be backed up with a solid rationale for transferring to demonstrate you've thought it through and your numbers 'stack up'.
- You need to consider your partner's (financial) circumstances in your thinking.
- As part of the 'case' I put to the IFA, I was able to set out my current / projected outgoings over the next few years; do you know what your outgoings are now and likely to be in the future?
- Even if the IFA does not recommend transferring, you may still be able to be an 'insistent customer' and go ahead with the transfer. However, not all companies will accept DB transfers in these circumstances. HL don't for example, but AJ Bell do.
- As noted, your financial projections are unrealistic.
- Maybe it's a bit 'naughty' / disingenuous but if you're still keen to move the DB pension, you could consider getting the IFA to effect the transfer and accept the charges for a year or two and then move the funds out to fund(s) / platform of your choosing.
- As you're not currently 'in the property game', suggest you are mobile with work and it looks like you've 'more children coming along' you could always consider deferring things for a while. It may be beneficial thinking about the affect of putting some 'roots down' somewhere and / or seeing how things develop post Brexit and / or the missus going back to work.