Final Salary Scheme

Wolf52

Hello, I have a DB pension which has been deferred. I am waiting to receive a CETV for this as well forecasts of what it would be worth as a pension if taken at ages 55 and 60 with and without lump sums. I'm thinking that I would like to transfer my DB pension so that I can use the lump sum to pay off the mortgage and draw down thereafter if required.

As a back-up, I also will have full State Pension and (if I stay working for the next 20 years), 26 years worth of NHS pension (the 2008 and 2015 Schemes).

My husband is a brain tumour survivor with a limited life expectancy and I would like to be able to leave some of the DB pension to our only child (currently a teenager) which of course I would be unable to do under that scheme. My own health isn't great, I have autoimmune diseases, but nothing that will limit life expectancy. My husband will have a state pension, but unlikely to be a full one. He also has two small personal pensions that aren't worth very much as he is unable to pay into them.

Do you think this would be a sensible course of action from me - I've just turned 49.

thanks

p00hsticks

Wolf52 wrote: »

Do you think this would be a sensible course of action from me - I've just turned 49.

Without knowing the figures, and how comfortable you would be handling your investment risk if you moved to a DC pension, my opinion is that it's not possible to say - I suggest you post back when you have the figures you have asked for.

Wolf52

Okay thanks I will.

bostonerimus

With interest rates so low I'm not sure that using the lump sum to pay down the mortgage is the best idea.

When you get the numbers let us know. The CETV can be very tempting and look like a better deal than the final salary pension, but once all the costs and risks of investing the CETV are assessed it often isn't such a clear cut decision. However, wanting to leave an inheritance and health issues are factors in favor of taking the CETV.

Wolf52

Hi just an update, spoke to Capita this morning as it's been a month since I asked for the valuations and wanted to check they hadn't been lost in the post. Well they haven't sent them out yet, apparently they're checking the figures.

Will update once these are received.

Happy Christmas

xylophone

My husband will have a state pension, but unlikely to be a full one. He also has two small personal pensions that aren't worth very much as he is unable to pay into them.

Has your husband obtained a state pension statement?

https://www.gov.uk/check-state-pension

Is he unable to work? Is he receiving NI credits?

https://www.gov.uk/national-insurance-credits

Even if he has no relevant earnings he can pay up to £2880 into a personal pension each year and receive tax relief.

If you want to transfer out of a DB pension with a value greater than £30,000 you will require the advice of a pension transfer specialist.

https://forums.moneysavingexpert.com/discussion/comment/73588433#Comment_73588433

Wolf52

Has your husband obtained a state pension statement?
Is he unable to work? Is he receiving NI credits?
Even if he has no relevant earnings he can pay up to £2880 into a personal pension each year and receive tax relief.

Yes, I've checked his NI record and he has about 5 years incomplete although he now receives credits via ESA and is slowly rebuilding this. He's not able to work due to the tumour, seizures, fatigue and visual disturbance. Also not allowed to travel anywhere on his own for his own safety. Thank you for the links. He literally has no income to pay into his personal pensions, and I can't afford to do so for him.

I would imagine the CETV will be greater than £30k and will look for an appropriate IFA with DB transfer experience.

Nina

Wolf52

Update.

I rang Capita to find out when I would be hearing from them and they've told me that the actuaries are reviewing their procedures on providing CETVs. I should expect to hear from them early March.

GunJack

^^ that sucks, especially when you asked last Nov

Wolf52

Yep, I agree, knowing my luck, the figure will be about 10 times rather than the 30 to 40 times they have been offering.

HappyHarry

The trustees have a maximum of three months to set a guarantee date (i.e. the date at which the CETV is set) and they have a further ten days from that date to let you know the actual CETV.

e.g. If you requested a CETV on 10th November, then they must prepare a CETV for no later than 10th February, and they then have to let you know that CETV by 20th February.