Pension Pot Increase

johnsmclean

Hi,
a previous employer has told me that my DB pension pot is worth £150000. I am 57 years old. When I turn 60 will the value have increased ? If so, will it increase by RPI ?

Thrugelmir

Your DB pension has a transfer value not a fund. The transfer value may not increase however the value of your pension benefits may well do.

Brynsam

Transfer values fluctuate according to market conditions, and trustees can change the basis of calculation (normally based on professional advice from the scheme actuary). Generally they go up as someone gets closer to retirement age, but that certainly isn't always the case. If a scheme becomes seriously underfunded, transfer values may (temporarily) be legitimately paid at a reduced rate if the trustees follow a fairly lengthy statutory process. If that happens, you will be told this is the case and the trustees will normally be able to give an estimate of when full transfer values will be paid.

The pension 'revalues' between the time you leave active membership of the scheme and the time you start to draw your benefits. There are certain statutory requirements, but there are also ones which are scheme specific. If you ask the scheme administrators they will be able to confirm.

sandsy

A DB pension gives you a guaranteed income for life. If you choose to take the cash equivalent value, you give that income up. Before you can do so, you must, by law, take professional financial advice as it's generally considered that giving it up is unsuitable for most people.

tacpot12

As above, the transfer value will not change in line with Inflation, but the Benefits paid usually will.

Brynsam

sandsy wrote: »

A DB pension gives you a guaranteed income for life. If you choose to take the cash equivalent value, you give that income up. Before you can do so, you must, by law, take professional financial advice as it's generally considered that giving it up is unsuitable for most people.

In case others with lower transfers values are reading this...the legal requirement to receive advice does not apply to DB transfers of £30,000 or less.

johnsmclean

Thanks for all replies.