Still got Pensions Dilemma....

Audaxer

Another thing that would put me off the transfer would be the ongoing charges of an IFA to manage the £810,000 transferred from the DB pension. I see that you were quoted 1.4% ongoing from the first adviser which seems really excessive as that would amount to over £11,000 per year just for the DB pot alone. I don't know what the second adviser quoted, but hopefully if you do go down that route you could find an IFA to manage the portfolio for a significantly lower percentage.

happyandcontented

Thanks, the second adviser quoted lower for the 400k but he was the one man band.

The first adviser didn't quote for the DB pension as he didn't consider the transfer advisable.

mgdavid

happyandcontented wrote: »

Only as ultra cautious as we are being!! .......

Query this; if you were being ultra-cautious you would keep the certainty of the DB pension rather than hoping it should grow if cautiously invested (your words). Maybe you are more of a risk-taker than you think.

Can't envisage either of you living to 95? Have you examined your own and your antecedents health, and looked up the life expectancy for your cohort? - you may be surprised.

There are a lot of metrics to help you to a decision so I wouldn't rely on gut feel alone - or at all.

happyandcontented

Ok, so to update, we saw another advisor from HL and he seemed to be willing to explore all our options.

He noticed that if the pension holder died before the pension went into payment only a return of premiums would be payable, no spousal pension. Which is an issue as there are 3 years at the earliest before that would happen. He didn't say this bolstered the view for transfer but did flag it as a concern. He also gave us figures on what the DC pension would produce and how it could be varied to bridge the gap (and then reduced back down afterwards)before SP kicked in.

So, what we decided to do was allow him to investigate all our DC pensions with a view to holding onto the DB pension if that investigation decides that they could be left where they are or better invested to produce the required return. We may also take life assurance to cover the problem of death before the DB pension would be in payment. All of the above is cost free.


None of the other advisers seemed as thorough to us. He told us at the outset that the LTA would kick if we transferred the DB pension and that having missed the boat with LTA protection this could potentially cost us £45,000 in tax.

To investigate the DB pension and advise on it would be £1500, so we may decide to go down that route if needed.