Deferred company pension

LHW99

Whilst transfer values seem to be good currently, you probably would have to get independent, and well qualified advice, which is costly (for a good reason) in order to move the pension.

Even if the value looks good when you get it, you are giving up the certainty of an inflation linked income (at whatever level) and if you don't want to spend time and anxiety when you are getting well on in years, then leaving those decisions to TW may be best for you.

atush

Can't see any sense in drawing anything now. I'd have to pay 40% tax on it.

Not if you whacked the equivalent into a PP, sipp or your current employers pension.

Alice_Holt

atush wrote: »

Not if you whacked the equivalent into a PP, sipp or your current employers pension.

If you have a combination of both earned income and pension income that takes you into the 40% tax marginal rate, do pension contributions always attract a 40% tax uplift?
I have in the back of my mind something about 'relevant earnings' being used to determine the tax uplift to pension contributions. Relevant earnings ( I think ) excludes income from pensions.
In which case then, even with a total income that takes you into the 40% tax bracket, it may not be possible to get the equivalent tax benefit on SIPP pension contributions. That being determined by the tax rate on employed earnings.

Or have I got this wrong?
(I rather hope I have, as I was going to something similar to that suggested by atush)!

xylophone

GMP gets no mention in my letter.

It appears that you were in a DB Scheme 1982-1990 - if so, you were almost certainly contracted out and the information on GMP will be relevant.

But at 2k a year, why on earth would they offer me 100k transfer!?

They might not - but you have a pension payable for life, at least partially index linked in payment and probably providing a widow's pension, so your guess at a CETV of £35,000 might well prove an underestimate.

See post 9 here https://forums.moneysavingexpert.com/discussion/comment/72392703#Comment_72392703

My wife worked for 8 years in a bank in the eighties nineties. Contacted them recently for numbers. She has ten years to go for the normail retirement date of 60 and was quoted £2.4k for her db pension currently.

The CETV figure was £146k.

eastcorkram

xylophone wrote: »

It appears that you were in a DB Scheme 1982-1990 - if so, you were almost certainly contracted out and the information on GMP will be relevant.



They might not - but you have a pension payable for life, at least partially index linked in payment and probably providing a widow's pension, so your guess at a CETV of £35,000 might well prove an underestimate.

See post 9 here https://forums.moneysavingexpert.com/discussion/comment/72392703#Comment_72392703

Indeed! My estimate may well be low. Other people's estimate may well be high. When I hear from them, I'll know, and if I can find it by then, I'll update this thread.
However, that wasn't really the main reason for this thread. I was more interested in that offset thing.

Joey_Soap

OP, a word of caution. There is a lot of advice about how you can transfer this pension out of the DB scheme. Please stop and think - Is this the only DB pension you have? Plus the state pension? Your SIPP with HL will one day, almost certainly lose anything up to 50% of its value over a short period. (If the SIPP is based on stocks and shares). It then has to grow by 100% to get back to where you were. Are you OK with this? I suggest that come Armageddon, you would be very glad you had your RTZ final salary pension and your state pension. I just think you should not be dazzled by cash in hand. HTH.

eastcorkram

Joey_Soap wrote: »

OP, a word of caution. There is a lot of advice about how you can transfer this pension out of the DB scheme. Please stop and think - Is this the only DB pension you have? Plus the state pension? Your SIPP with HL will one day, almost certainly lose anything up to 50% of its value over a short period. (If the SIPP is based on stocks and shares). It then has to grow by 100% to get back to where you were. Are you OK with this? I suggest that come Armageddon, you would be very glad you had your RTZ final salary pension and your state pension. I just think you should not be dazzled by cash in hand. HTH.

Yes, I'm well aware of that, and explained in post 4 that my instinct would be to just leave it.

xylophone

I was more interested in that offset thing.

Explanation in link previously given but you need to have TW explain the specifics of your scheme - was age 65 Scheme Normal Retirement Age?

eastcorkram

xylophone wrote: »

Explanation in link previously given but you need to have TW explain the specifics of your scheme - was age 65 Scheme Normal Retirement Age?

I'd imagine it is, as the letter mentions 65 as being when the pension would be paid, and when that offset payment would stop. I suppose when I was in that scheme, 65 was also my state pension age, though it's now 66.
I don't ever remember having any booklet or paperwork for this scheme, either on joining or leaving. Though I suppose it's possible I had some. Have moved seven or eight times since then, and also had loads of paperwork stolen a couple of years ago. That included lots of banking and financial stuff, including other pension scheme paperwork. But I don't recall anything from RTZ or TW.

xylophone

GMP age used to align with male/female state pension age but this has not been the case for a number of years - GMP age has remained 60/65 despite the changes to SPA.