Final Salary deferred pension Transfer to a SIPP

VikingWood65

Hi all yet another novice with so many questions. I have a Final salary scheme closed in 2009 and a SIPP created (post consiolidation of several small pensions) in 2017. I am 54, have been quoted a forecasted pension in 2030 of circa £31,000 form the FSPS and they offered me £507,000 CETV. I have just requested a further CETV a year later as I am approaching my 55th and want to know whethere to transfer to my current SIPP which also has around £200k in it. This gives me acces to a good sum to pay off my mortage and start living today as I intend to keep working as a consultant post 65 if I need to. However, the quotes I am getting for a report are circa £15-20k which to me is a captive sitiation for the financial industry as even as a consultant in a specialist market myslef, I couldn't justify charging that much for a 30 page report, which in the main would be fairly generic with the exception of the numbers based on my circumstances themselves. Seems like a massive con to me given I know what I am doing, understand the risks but then I have to rely on losing £15-£20k for the priveledge od someone else telling me what I already know. Is it essential to pay this much for such a report if you dont need it? My FA won't do this either as he is telling me that many FA's are dropping out due it being seen as the next PPI risk area and that you need many qualifications to carry out such an anlysis. However, he is happy to take a commission for thr teferral to someone who is?? Mind boggles. Thanks all. Mike

Dazed_and_confused

FA's aren't usually recommended on these forums.

Why not use an IFA?

Why are you getting a report if, in your words, "you don't need it"

tacpot12

The adviser needs a pension transfer qualification, and professional indemnity insurance covering this work. Premiums for this insurance have been reported as having risen steeply; not being an IFA I don't know if this is true but it seems likely.

I would ask to see evidence that if the quote is £20k, then £18k is going to the insurance company that is underwriting the advice, because you are correct that the actual advice work should cost a lot less. I paid £1000 for this transfer advice on two db pension three years ago before premiums started to rise.

Keep shopping around and ask the hard questions. Any IFA that won't discuss their expenses isn't someone you want to be advising you.

VikingWood65

Thanks for the response, i am having to procure one as it was explained to me that it is in fact a legal requirement and not optional. However, I am sure there must be a way around this if i am certian I dont need one.

Albermarle

However, I am sure there must be a way around this if i am certian I dont need one.

There is no way around this . The reason is that without this safeguard, many people would transfer from FS schemes when it was not in their best interest ( which is usually)
There has been a similar thread already today on he same subject.
https://forums.moneysavingexpert.com/discussion/5995146/defined-benefits-pension-transfer-rip-off

xylophone

https://www.first-equitable.co.uk/final-salary-pension-transfer-advice/

have been mentioned on the forum - but whether or not they would suit your situation would be a case of doing your own research.

squirrelpie

If you have a final salary pension that will pay £31k/annum, why do you want to change it? (assuming it is index-linked etc). You can access your SIPP in less than a year to provide for immediate needs and you also plan to keep working, so I'm not clear what is driving you?


Note that your plan to keep working will be dependent on you keeping your health and other external factors, so I would have an alternate plan in mind as well.

dunstonh

Premiums for this insurance have been reported as having risen steeply; not being an IFA I don't know if this is true but it seems likely.

The PI market is very hard at the moment and two major PI insurers have stopped offering cover on DB transfers in the last month. This is mid term as well as not just at renewal. Literally, the FCA issued a briefing at 6.30pm on Friday (what lovely timing) about the FOS increase and how some PI insurers didnt meet the new limits and told firms they had 5 days to sort out new cover or ensure they existing PI insurer would cover them.

t was explained to me that it is in fact a legal requirement and not optional. However, I am sure there must be a way around this if i am certian I dont need one.

If it is a legal requirement (which it is) then why do you think there is a way around it?

as I am approaching my 55th and want to know whethere to transfer to my current SIPP which also has around £200k in it.

What is it about a £200k CETV that makes you think it is a good option to give up an indexed linked pension currently set to £31k?

I couldn't justify charging that much for a 30 page report,

Nobody can. That is not what you are paying for.

which in the main would be fairly generic with the exception of the numbers based on my circumstances themselves.

No it isnt.

Seems like a massive con to me given I know what I am doing,

If you ran a business or were self employed, maybe you would understand risks more. Indeed, your lack of understanding of risks would be a concern about you taking on a risk based pension and giving up a guaranteed one.

My FA won't do this either as he is telling me that many FA's are dropping out due it being seen as the next PPI risk area and that you need many qualifications to carry out such an anlysis.

It is a transaction that is considered missold unless proven otherwise by the FCA. Historically, only around 1 in 10 would be considered suitable for transferring. A number of PI insurers have pulled out of covering DB transfers mid term and those that want to continue doing it are seeing massive increases in premium.

However, he is happy to take a commission for thr teferral to someone who is?

Commission hasn't existed since 2013.

AnotherJoe

dunstonh wrote: »

What is it about a £200k CETV that makes you think it is a good option to give up an indexed linked pension currently set to £31k.

You misread it was a CETV of 507k.

WillowCat

If I had £507k kicking around (I don't) I'd happily give it up for £31k pa indexed linked.

AnotherJoe

To be fair it's 507k now or 31k in 11 years time.