Transfer out or guaranteed benefits

Prism

C_Mababejive wrote: »

IS 4% optimistic..?

I would say so. Its more like 3.25% as a UK investor and less than 3% after fees. However most people are probably likely to take a small risk on using a higher withdrawal rate or use variable withdrawals.

However, the point really is that none of this sounds good compared with the OP's current benefits.

mgdavid

wjr4 wrote: »

£28k to transfer out is a disgusting amount of money!! Our firm have done a few large DB transfers and we cap the fee - I’d never dream of charging someone £28k!

Recently?
Do you mind me asking how much your professional indemnity insurance costs you?

wats0062

"Why don't you look at life assurance if you're worried about not leaving money if you die early? That would seem a much simpler and vastly less risky solution."

Not really thought of that, although I already have cover to approx £57k (to 75 yo).
I just did a compare the market search. £200k cover would cost £15k over 20 years and if it's like my existing policy the premiums go up annually.

wats0062

Brynsam wrote: »

So much for pension freedoms! You aren't being 'forced' to do anything, so perhaps cut out the drama such a sentiment brings. If you are still in employment, what sort of life cover does your employer provide? If you aren't, any reason why you can't take out your own cover?

Wasn't intending to be dramatic, but in my eyes I will shortly have the decision to make and I'm finding it very difficult.
My employer does provide cover to 10x salary whilst I am working but I am fed up of work and want to pack it in or at least do something more enjoyable.
I replied to life cover option above. It wasn't something I had really considered. That's why I'm here looking for suggestions.

wats0062

wjr4 wrote: »

£28k to transfer out is a disgusting amount of money!! Our firm have done a few large DB transfers and we cap the fee - I’d never dream of charging someone £28k!

£28k may actually include first year charges, I'm not sure. In our discussions I do recall being told 1% of CETV transfer cost. However that would be 1% of £936k so figures don't really add up.

wats0062

I need to add a bit more information now. I didn't want to make my OP too long and put people off reading it.
My FS pension scheme closed last June (2018). Benefits deferred.
My employed chucked in incentives to convince us to allow the scheme to close without kicking up to much fuss. One of the incentives is that they will pay 13% into the new scheme if I pay 8% (for 3 years only).
Another incentive was that I could take my FS pension and work for up to 2 years. I could therefore take up this option and pay a further approx £28k a year into the new scheme via smart pensions.
I have a £50k mortgage outstanding on one of the rental properties.
I have insurance cover worth approx £57k to age 75.
So in summary I could have £29k/annum plus the £192k lump sum from the FS scheme. Then in 2021 have a further £70-80k to drawdown. I like this option but I'm that !!!!ed off with work and I don't know if I can stand another 2+ years. This would also rule me out of any of the frequent release packages as I would have agreed a leaving date.
My head says take full advantage of the above, my heart says I can't stand another 2 plus years. Feel a bit guilty "complaining" as I'm much better off than a lot of people but after working 41 years, I'm mentally worn out.

HappyHarry

wjr4 wrote: »

Yes recently & I don't personally deal with that so I wouldn't know! We don't charge clients more than £5,000 for a DB transfer though.

If your firm is charging a maximum of £5,000 for a £936,000 transfer, then you are very, very cheap. I certainly wouldn't take on such a risk for that kind of fee.



If you have PI cover for DB transfer advice since 1st April 2019, and you're still charging only £5,000 to the client, your profit margin is going to be very low, if not non-existent.

wats0062

Thrugelmir wrote: »

If you are used to a £60k lifestyle. Why not work a couple of years longer. That'll boost your pension income considerably. Likewise provide your wife with a far higher guaranteed lifetime income.

Unfortunately it won't. The FS scheme is now closed and my benefits deferred.

LHW99

As Prism says

Make the lump sum work for you to cover the reduced amount if you die early. Using the same logic as before that lump sum could be used to provide a top up to income of maybe £6.5k after fees, asuming you don't spend it early and allow it to grow with inflation.

and assuming that you may be at least in your 60's / 70's before you pass away (no health issues mentioned) your wife could get an annuity with the lump sum to boost her guaranteed income, if required, as they become better value as you age.

wats0062

Well for what it's worth and of course to end the thread positively rather than just disappearing. I am going to take my FS pension from approximately September 2019 and work for 2 more years.
This will give me a lump sum of nearly £200k tax free, which will go into buying at least one more house (I have tenants lined up). The annual pension will be almost £30k, a third of it rising annually.
With my chosen option I can build up a second company pension over 2 years in the new scheme which has incentives. I will find myself well into 40% tax bracket with this option but I can use smart pensions to get round this. So a second pension at September 2021 of approx £70-80k.
I have ruled out the transfer out option, because, the transfer charge is too high, the ongoing charges are too high (with no guarantee of performance) and I can't get a clear answer to what my options would be if I want to sack off my chosen FA at any point.
Thanks for all the replies and hope others benefit from the thread. (:))