LGPS Pension - Transfer or not!

doddie79

Aged 37, recently left work for the LA and have accrued a pension pot just shy of 50k. It's an LGPS pension and so I can't continue to put into it now as I have left the council. I am trying to figure out is it worth transferring this pension or leaving it where it is. I suppose that if I return to council work in the future that it may be worth leaving it where it is for now.

I am now self-employed, overpaying my mortgage and saving a decent chunk into an S&S ISA each month. I have about 25k in the ISA. I'm a basic-rate taxpayer and so, from my reading around, believe that an S&S ISA (perhaps combined with a S&S Lifetime ISA) would be more advantageous to me at the present time than a SIPP. Or do I have that wrong? I'm aware that my self-employed income will vary and so am trying to put as much into the ISA and overpay the mortgage while times are good. With two young children, growing all the time, I expect the amounts I can put away will vary but I'm keeping a close eye.

greenglide

Are you truly self employed or are you employed by you own limited company. For pensions this matters and many posters don't understand their own employment status.

I would leave the LGPS where it is, the CETV of LGPS is generally not good and having even a small amount of DB pension can be a useful guarantee in the future.

JoeCrystal

You don't have pension pot, not really. How much is the annual pension they will pay out on your NRA? Having ironclad guaranteed retirement income is like gold dust in this country.

doddie79

Yes, sole trader. Not Ltd.

doddie79

On its own it's not much at all. It would give 5.5k a year. But I plan to build on it. A return to LA work in the future isn't off the cards but in the meantime looking at other ways to build on it.

JoeCrystal

... That is pretty good deal if it is in today's money. In order to get £5,500 index linked pension at 68, a 18 years old, on salary of £28,000 would have to contribute about 18% of the salary for fifty odd years. Of course, the annuity at the present is quite low compared to the past. If it is valued £50,000, then that is really low. According to the HL calculator, you would need a pot of £310,000 for example. In other word, just leave it there and use it as a foundation of your retirement income. There are other means to do it without touching this great pension.

doddie79

According to the transfer doc the Transfer Value is just under 50k but my alternative index-link deferred benefit is £5.5k with a 2k lump sum. Not a lot but it's a start.

It says on my account that "These benefits are held in the Pension Fund where they increase in value every year in line with the cost of living, until they start to be paid." Can't touch it before 2047 (at the moment) but it's something to build on. I will leave it where it is then.

Thanks for the reply!

doddie79

Ok, yes. I think your right about the CETV having done a little googling. I'll leave it and put into pots elsewhere. ISA's for the time being. Thanks for the reply.