Mandatory Financial Advise

colnotlob

My wife has a small deferred Local Government DB Pension. It's valued at just over 30K. She has a SIPP which she is now paying into and she wants transfer the LG Pension into the SIPP. However because it's over 30K she needs a letter from a Financial Advisor which is proving very difficult to obtain because the pot is under 100K. She doesn't need advice she knows what she wants to do, retire at 61 and use the SIPP as draw-down to live off between 61 and 65 when I will start to receive my 2nd DB pension. The letter can even say don't do it as far as we are concerned, we just want the letter. Has anybody else had similar issues.

MallyGirl

many have.

The main challenge is that her SIPP provider has to be prepared to accept the transfer 'against advice' if that is what the transfer specialist decides to say. Most won't accept it - she will need to check with hers if they do.

tacpot12

You will need to call around the IFAs in your area to find one that will do the pension transfer advice for an acceptably low fixed fee. Don't mention to the IFA that your wife will transfer regardless of the advice given, just make sure that when you agree the fee for the advice that the fee includes the work of the IFA to sign any document your wife needs to prove that she has received the advice. Ideally your wife would have the forms ready to take with her to the final meeting with the IFA when they explain their advice to her.

xylophone

She needs the advice of a Pension Transfer Specialist not just any Financial Adviser.

This will not be cheap.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

While you are required to obtain the advice, you do not have to follow it - however, the choice of providers to accept the transfer may be limited.

https://www.professionaladviser.com/professional-adviser/news/3015853/martin-tilley-sipp-providers-accepting-insistent-clients-is-questionable

https://www.moneyadviceservice.org.uk/en/articles/transferring-out-of-a-defined-benefit-pension-scheme

Will your wife's provider accept it ( assuming that she finds a PTS to advise on the transfer)?

woolly_wombat

LGPS experts regularly post on here that transferring out is poor value.

Has your wife investigated drawing down her SIPP to depletion then taking her LGPS pension early?

colnotlob

Thank you all for your input so far.
I am aware that a certain grade of Financial Advisor is required (PTS). I have spoken to 3 already and not one is interested because the pot is under 100K.

The money is needed between the age of 61 and 65, it is to be used in the gap until I get my 2nd pension at 65, drawing a pension of £1626 pa (+CPI) at 66 and 4 months is too late . Taking her pension early would not be enough nor would it be taking full advantage of the Tax Allowance she could get.

Brynsam

tacpot12 wrote: »

You will need to call around the IFAs in your area to find one that will do the pension transfer advice for an acceptably low fixed fee.

'Acceptably low' might give rise to false hopes for OP. The amount of work is the pretty much the same for the IFA whatever the transfer value - and it is all high risk business.

xylophone

The trouble is that even if she finds a PTS willing to advise, the fee may be very high for a modest pot.She could try here and use the filters on the left to search for a PTS - then she'll have to continue ringing round.

https://adviserbook.co.uk/

Silvertabby

Have you obtained an actual CETV, or are you using the notional value of 20 times pension plus any automatic lump sum? If so, you need to request an official CETV before going any further.

colnotlob

Silvertabby wrote: »

Have you obtained an actual CETV, or are you using the notional value of 20 times pension plus any automatic lump sum? If so, you need to request an official CETV before going any further.

The figure is based on the letter she received after she finished working for the council in June this year.

Silvertabby

colnotlob wrote: »

The figure is based on the letter she received after she finished working for the council in June this year.

It would be unusual to supply an unrequested time sensitive CETV along with guaranteed deferred benefit details.