Defined Benefits Pension Transfer Rip-Off

JillyC8

Looks like the only thing the OP can do is nothing in that case.

My assumption was that the smaller the amount being transferred, the lower the risk to the adviser, if, as pointed out, the sum involved may have to be reinstated in some way at a later date.

shinytop

I can't really add anything other than an illustration of something that has contributed to this situation. Due to a long commute I sometimes listen to LBC (national commercial talk radio). I regularly hear adverts like, "Did you transfer a FS pension in the past? If so you cold be owed thousands, even if you can't remember anything whatsover about it!! Call Scumbag and Leech legal services now on XXXX!!!".

AnotherJoe

Exactly and even if a small % of these cases go against the advisers they need to pay to defend all of them and they do that via insurance whose cost has gone up, and gone up a lot in the last month.

agent69

I have a defered DB pension which when combined with my state pension (when I get to 66) will easily cover all my normal expenditure. It's index linked, and there for life.



The only reason I can see for giving that up is if you are worried about getting run over by a bus the day after you retire.

AnotherJoe

Here's an idea they ought to do what a quiz show I was on did. It was a team game with a monetary prize to be shared amongst the team. We all had to sign how the money was to be shared and they videoed us signing and reading out how the money was to be distributed (essentially was it just to captain, equal shares to the whole team or equal to just the ones on TV - there was one team member in reserve)
So in this case you'd have the client saying to camera "I am fully willing to take on the risk I acknowledge I may lose out I understand I may do worse than if I retained my dB pension and I understand if I do cash in my DB in against advice that that is wholly my responsibility."

Harder then to say you didn't really understand the form.

AnotherJoe

agent69 wrote: »

I have a defered DB pension which when combined with my state pension (when I get to 66) will easily cover all my normal expenditure. It's index linked, and there for life.
The only reason I can see for giving that up is if you are worried about getting run over by a bus the day after you retire.

Some CETVs are exceptionally high and change the previous situation of it usually being disadvantageous hence more people doing them these days. you might get the equivalent of the DB for say just 2% which gives ample leeway even in the event of major crashes plus it give you the flexibility to take it on your schedule. Maybe higher initially dropping much lower later.
You may also have limited life expectancy or simply wish to leave a lot of money to your kids or whatever.

beamyup

The point us that consumers are being ripped off. The charges for the service are much too high and in some cases are causing the wrong outcome.

I (as a consumer) do not care what the cause is - whether greedy IFA or the nanny state.

My definition of Rip-off = "something that is not worth what you pay for it"


Something needs to be done about this situation. IFA's should be pushing for changes in legislation. Government should take note and act.

If IFA's are truly independent advisers, they should NOT be swayed by the fear of litigation against them for giving the correct advice. The current litigation risk situation with DB transfers means that the advice is not correct in some cases.

nigelbb

beamyup wrote: »

The point us that consumers are being ripped off. The charges for the service are much too high and in some cases are causing the wrong outcome.

I (as a consumer) do not care what the cause is - whether greedy IFA or the nanny state.

My definition of Rip-off = "something that is not worth what you pay for it"


Something needs to be done about this situation. IFA's should be pushing for changes in legislation. Government should take note and act.

If IFA's are truly independent advisers, they should NOT be swayed by the fear of litigation against them for giving the correct advice. The current litigation risk situation with DB transfers means that the advice is not correct in some cases.

The simplest bit of legislation would be a prohibition on transferring out from a DB scheme. This prohibits idiotic trustees offering overgenerous CETVs which is the only reason to transfer out. It also prevents IFAs giving bad advice or being sued whether the advice is bad or good. It's not the Nanny State it's just the government being prudent with offering tax incentives for people to save for their pensions.

soulsaver

£1450 fixed fee here may be suitable:
https://www.first-equitable.co.uk/final-salary-pension-transfer-advice/

No connection.

There are other low cost possibilities mentioned you can find on here with a little bit of effort... you need to do some work to find them.

beamyup

nigelbb wrote: »

The simplest bit of legislation would be a prohibition on transferring out from a DB scheme. This prohibits idiotic trustees offering overgenerous CETVs which is the only reason to transfer out. It also prevents IFAs giving bad advice or being sued whether the advice is bad or good. It's not the Nanny State it's just the government being prudent with offering tax incentives for people to save for their pensions.

I see your point of view.
You have argued FOR a nanny state approach (its odd that you don't think so ). That in itself would cause the wrong decision to be enforced in a number of cases.