Deferred Scottish & Newcastle pensioner; keep or jump?

sanibel686

Hi I'm one of the S&N pensioners who now has a deferred pension pot under Heineken.

Under S&N this was a simple final salary scheme rising with RPI and no-one in their right mind would jump out but; since Heineken took over 11 years ago and reneged on the RPI undertaking the pensions have suffered a cumulative loss in value of more than 10% in comparison to what they would have paid out under S&N.

A pensioners collective did take Heineken to FOS and Heineken lost but it was a hollow victory as being a foreign company they were outside of FOS jurisdiction.

See more details at sn pensions group dot com

In the past five years the average annual increase has been less than 1.4% or around 0.4 x RPI

My concerns are that Heineken may give out less and less and then there is the issue that this is a foreign company and brexit is just around the corner and if I decide to stay with them I will have lost access to £450,000!!

From the last annual report it appears that as deferred pensioners come up to retirement around half now stay and half take the money and run.

I have spoken to more than a dozen IFAs but so far I've only got generic advice and with just months to my retirement age (60) and I'm just stuck on which way to go.

Are there any deferred S&N pensioners out there who could share their story to help me or indeed anyone else who has a qualified view vis what is available with a reasonable SIPP/Drawdown.

My numbers look like this (Rounded)

If I go my transfer value is £450,000
If I stay then my pension from 60 to 66 would be £19,300 including a £1,700 supplement, it drops at age 66 to £17,600. All these numbers are at today's date
It also comes with the benefit of a 50% widows pension.

xylophone

I'm just months to my retirement age (60)

Normal Scheme pension Age is 60?

If so, will you be permitted to transfer out within a year of Scheme Pension Age?

https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/uk-transfers

You are male? If so and you were a member of the scheme between 1978 and 1997, how is the GMP treated when the pension comes into payment?

The increases to the post 97 pension are not discretionary but are linked to RPI to 5%?

Is this your only pension apart from state pension?

Assuming that you could transfer out (and remember that you would need the advice of a Pensions Transfer Specialist which is far from cheap), do you feel up to handling your own investment decisions?

Would your wife, if she were widowed?

Remember that you have the prospect of living well into your nineties - one person I knew was drawing his DB pension up to the age of 95+ having taken it at the age of 60.

https://www.royallondon.com/about/media/news/2018/may/five-good-reasons-to-transfer-and-five-good-reasons-not-to-royal-london/

Have you and your wife obtained state pension statements?

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

Marcon

Maybe time to talk to an IFA and get specific rather than generic advice?

Brynsam

sanibel686 wrote: »

A pensioners collective did take Heineken to FOS and Heineken lost but it was a hollow victory as being a foreign company they were outside of FOS jurisdiction.

My concerns are that Heineken may give out less and less and then there is the issue that this is a foreign company and brexit is just around the corner and if I decide to stay with them I will have lost access to £450,000!!

The FOS decision, and Heineken's response to it, must have been a bitter pill to swallow.

I'm not sure what you mean by 'losing access to £450,000'. If you are within a year of the scheme's Normal Retirement Age, you no longer have a statutory right to transfer out, although you may be permitted to do so if the employer and/or trustees agree. Check with the administrators of the scheme. Once you start to draw your pension at 60, you no longer have a right to transfer - that applies to all UK schemes, not this one in particular.

Do remember that this is still a UK pension scheme and the trustees must run it in accordance with UK legislation and the scheme's own Trust Deed & Rules.

sanibel686

Hi Xylophone,

I was a member of the scheme from 88 to 98.

My GMP relates to around a third of the pension however irrespective of GMP the overall increases in the last 10 years have been around 0nly 40% of RPI per year.

I am able to transfer out, I've checked

We both have full state pension built up.

I also have other draw-down products in place totaling around half of the worth of the Heineken deal.

We don't see an issue around widows pension if I transfer it looks like most draw-down schemes are producing better than the historical increases of the Heineken 1.5% PA therefore it appears that I just bequeath my investment to my wife and this would be better than a 50% widows pension??

Marcon

I have spoken to many IFAs and asked them for specific advice with the condition that they must be familiar and experienced with the Heineken scheme. None have been able to give anything but industry generic advice, believe me I've tried!! If you know of an IFA who has the inside track on Heineken then give me his or her details!!

All I really want is to understand if the Heineken deal is worth it's salt anymore in relation to an average drawdown product.

Against my numbers provided in the initial post I have looked at the Hargreaves Landsdown Draw-down calculator and if I invest £440k and pick the average projection of 4% then I could get a pension of £22k PA until I am 91 years old.

Linton

It is unrealistic to expect to find an IFA conversant with a specific pension scheme out of the 1000's of pension schemes available. An IFA should however be able to examine the scheme documentation, understand what the acheme provides, and compare it with the alternatives.

xylophone

Your primary requirement is a Pensions Transfer Specialist.

https://www.handbook.fca.org.uk/handbook/glossary/G856.html

https://adviserbook.co.uk/

You need the filter on the left hand side - you will check when you ring that the person concerned has the necessary qualifications/permissions to advise on a DB transfer.

Dox

sanibel686 wrote: »

I have spoken to many IFAs and asked them for specific advice with the condition that they must be familiar and experienced with the Heineken scheme. None have been able to give anything but industry generic advice, believe me I've tried!! If you know of an IFA who has the inside track on Heineken then give me his or her details!!

All I really want is to understand if the Heineken deal is worth it's salt anymore in relation to an average drawdown product.

Very unlikely you will find an IFA who is familiar with a particular scheme, unless they specialise in particular 'giant' schemes where the volume of members seeking advice makes it worth their while. The IFA's job is to make themselves familiar with a scheme when approached for advice, not mug up on a 'just in case' basis.

sandsy

The transfer value looks low compared to the annual income you will receive. I think you'd find it hard to find an adviser who'd recommend a transfer on the grounds you've given here.