Advice on crystallised pension.

enthusiasticsaver

I wonder if I could ask advice on a deferred pension of my DHs and the advisability of transferring it? It only has around £18k in it and is the remainder of his occupational DC pension he had been investing in since 2008 until 2016 after his company ceased his final salary pension.

He took the DB pension in 2016 on retirement and the 25% TFLS came from the DC. pot to maximise the DB frozen benefits. I told him not to take the whole DC pot when he took the TFLS as his marginal tax rate was 40% so he would have had a large tax bill. I think therefore the DC pot must be linked to the DB pension but separate as the lump sum did not come from the DB pot at all thus maximising the monthly pension. The £17-£18k left has been left untouched. He is allowed some flexibility in drawdown (one withdrawal a year, minimum £10k or balance if less) so I calculate he needs to take this in two separate tax years now he is a BR tax payer before his state pension kicks in in 2024. Or he can transfer as presumably a crystallised pension to one which offers more flexibility in drawdown.

We have recently seen an IFA who is exploring the possibility of moving all our pensions/investments barring our DB pensions to one platform but he has mentioned that there are apparently strong links and some protected rights to the DC pot which might mean it is inadvisable to move it. Any idea as to what sort of rights he would be giving up by moving it?

Marcon

enthusiasticsaver wrote: »

I wonder if I could ask advice on a deferred pension of my DHs and the advisability of transferring it? Without an accurate picture of the scheme in question, it's not possible to give you any property informed comment - just guesswork, which is never a good idea! It only has around £18k in it and is the remainder of his occupational DC pension he had been investing in since 2008 until 2016 after his company ceased his final salary pension.

He took the DB pension in 2016 on retirement and the 25% TFLS came from the DC. pot to maximise the DB frozen benefits. I told him not to take the whole DC pot when he took the TFLS as his marginal tax rate was 40% so he would have had a large tax bill. I think therefore the DC pot must be linked to the DB pension sounds like what is known as a hybrid scheme but it is essential that you know the full details before making any decision but separate as the lump sum did not come from the DB pot at all thus maximising the monthly pension. The £17-£18k left has been left untouched. He is allowed some flexibility in drawdown (one withdrawal a year, minimum £10k or balance if less) so I calculate he needs to take this in two separate tax years now he is a BR tax payer before his state pension kicks in in 2024. Or he can transfer as presumably a crystallised pension to one which offers more flexibility in drawdown.

We have recently seen an IFA who is exploring the possibility of moving all our pensions/investments barring our DB pensions to one platform but he has mentioned that there are apparently strong links and some protected rights to the DC pot which might mean it is inadvisable to move it. Any idea as to what sort of rights he would be giving up by moving it? You need to ask the scheme (or get the IFA to do so)

Sorry the above aren't very helpful comments, but this sort of 'half fact' question means anyone trying to answer helpfully is left floundering. You really do need to establish a full picture of all relevant facts before going any further.

enthusiasticsaver

We will have to ask the pension administrators. As far as I was aware the two schemes were separate but the IFA seems to think they are linked so will see what he says. I just wondered if anyone had come across this before with a DB and DC pension linked together.