I transferred my £570,000 final salary pension – and regret it'

DairyQueen

ams25 wrote: »

So, for those that have transferred their final salary pension...how is it going? I am sure for some it makes/made sense...but probably not for many that have transferred.
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It certainly made sense for me. I accepted a x38 CETV last year. I would have opted for the transfer had the multiplier been somewhat lower.

I have reduced longevity. Spouse has a good DB pension and DCs. We also have SIPPs and other investments, mortgage paid, no debts, and will both qualify for full nSP.

Thanks to generous revaluation of the GMP element, and dismal revaluation of the excess, the bulk of the DB, once in payment, would never have increased (the government cancelled their obligation to pay indexation increases on GMP in 2016). The pension scheme rules had also changed and the excess, once in payment, would only receive increases at the 'discretion' of the trustees. The index-linked increase had been binned. The trustees had opted for zero increase in 2015 and 2016.

I researched the deferred benefits very thoroughly before making a decision but, for me, it wasn't a difficult decision. The company paid the IFA fee and he was happy to recommend the transfer. My only hiccup was finding a receiving platform. AJ Bell obliged (no charge).

I spent several months researching - this forum was very helpful.- before completely changing our SIPP portfolios and investing the 'new cash'.

Early days but, so far, no regrets. Right now I am counting my blessings as, for us, the benefits of transferring outweigh the risks. It was an exceptionally pain-free and cost-free process unlike the expensive obstacle-course so many people experience.

God knows how the guy in the article had chosen his investments but it would have been difficult to make a loss over that period.

kinger101

westv wrote: »

The FTSE 100 was around 7,000 this Month three years ago.
It's now around 7,500. A 7% increase. Hardly exceptional.
The big rise has been over the last 2 years.

But FTSE100 would have paid out about 4% pa in dividends too. HSBC's FTSE100 tracker (accumulation) would have returned about 20% over that period.

jamesd

So he's unhappy but could retire today on £30,000 a year instead of having to wait until he's 65. Makes no sense unless his knowledge of safe withdrawal rates is as bad as his investment performance.

Assumptions: something also needs to be done to pay off the mortgage or downsize, I've stuck to just pension income comparison. 40 year retirement, Guyton-Klinger 90% success rate initial income at 5.3% after 30% of costs. I've assumed other assets available to bridge until he reaches 55.