Deferred DB CETV value

Novice_investor101

I have a deferred DB scheme that is due to pay out £3500 pa (indexed) when I'm 65 - I'm currently 37. The spouses benefits is 60%, with some dependents benefits too.
I've recently acquired a CETV to see if it would be better to transfer out. I'm single, not intended to ever be married/have kids & I've plenty of years to build a DC pot with the cash transfer value.

The CETV came back at just over £48k. That figure doesn't sound good enough to be tempted to transfer it. What are people's thoughts? I'm thinking to leave it as is & see if a higher value can gotten in the future, or just keep it & take the pension.

The scheme is a closed scheme & I'm one of the younger members, so I'm expecting by the time I get to claiming it there won't be a lot of member left in it.

shinytop

I was (sort of) in your position 25 years ago. What I thought was relatively small DB pension from a job I was in for a short time has now turned into a significant amount. I doubt you'd get more than the DB pension for £48k.

drumtochty

You would be daft to take the deal. Just let the pension bubble away and take it at 65.

AnotherJoe

Its always good to have diverse sources of income. Unless you join a government organisation, you'll never have the chance to get a DB pension in future so keep this one, make sure to update them every time you move.

Brynsam

It's highly likely that your CETV would be higher as you get older (although there's no guarantee), but so too would be the cost of providing your retirement benefits, so just seeing a bigger number doesn't make it a better idea.

Given your age and the fact it's a closed scheme, you may well find that the benefits are 'bought out' (transferred to an insurance company) long before you get to 65. You will almost certainly still have an option to transfer out even after that's happened, but insurers aren't noted for generous CETVs!

Novice_investor101

I did plan to have it as a sort of "base income", along with the SP. So it gave me flexibility with drawdown. Looks like the best idea is to keep it.

AlanP_2

AnotherJoe wrote: »

Its always good to have diverse sources of income. Unless you join a government organisation, you'll never have the chance to get a DB pension in future so keep this one, make sure to update them every time you move.

My son has joined his elder brother at a large private sector company that still offers a DB pension so they are out there, although in very limited numbers.

lexington013

Much better to keep this DB pension. 48k CETV is low to give up an index linked 3.5k per year.

kidmugsy

Novice_investor101 wrote: »

I have a deferred DB scheme that is due to pay out £3500 pa (indexed) when I'm 65 - I'm currently 37. The spouses benefits is 60%, with some dependents benefits too. ... I'm single, not intended to ever be married/have kids & I've plenty of years to build a DC pot with the cash transfer value.

At the very least wait a good while longer just in case that marriage/children thing changes.

MallyGirl

I agree - the CETV to give up my £1,756 pa (from 60) is £79,000. Leaving it where it is due to GMP plus spouse and dependent benefits

cloud_dog

MallyGirl wrote: »

I agree - the CETV to give up my £1,756 pa (from 60) is £79,000. Leaving it where it is due to GMP plus spouse and dependent benefits

Wow, that is a pretty high ratio. I have to be honest I would likely be tempted to dance with the devil with that ratio (although I obviously don't know what the GMP / revaluations are).