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Defined LPGS Pension

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Dutch_PedroDutch_Pedro Forumite
1 posts
Hi all,
I have an LGPS pension, with a value of about 130k
Having asked several companies for advice, the advice provided is very different.
Some companies have advised to take it out and invest, paying their cost.
Other companies strongly advise against.
My point is that when I die, my pot mostly goes with me leaving my spouse without.
Also why does the advice need to be so expensive, typically 6 / 8k
Has anyone got any similar experiences.
Pedro

Replies

  • xylophonexylophone Forumite
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    My point is that when I die, my pot mostly goes with me leaving my spouse without.

    Does your LGPS pension not pay a widow's pension?

    You have obtained a CETV of £130,000?

    You are seeking to transfer out to a DC arrangement?

    The advice of a Pension Transfer Specialist is mandatory - it is a high risk transaction for the PTS and he will be paying a high premium to his PI insurer - you are paying for his professional expertise and his costs.

    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf
  • SilvertabbySilvertabby Forumite
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    The LGPS does indeed pay survivor's benefits to eligible spouses/partners, at a rate of between 35% and 50% of the member's pension (with reductions for commutation/early payment being ignored).
  • enthusiasticsaverenthusiasticsaver Forumite, Board Guide
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    As silvertabby says your Lgps pays 50% to survivor if you die. Mine does the same. The cost of the advice covers insurance for the pension transfer specialist if they organise the transfer (not sure what happens if they advise against it and you do it anyway) and then 10 years down the line you sue them quite rightly for the loss of such a valuable benefit.


    What is to stop someone transferring the £130k to a drawdown pension and then spending it within a couple of years leaving them with nothing to live on? That is why it is not recommended and is probably only worth considering if you will only live for a few years after retirement and have no spouse.


    I have a small DB pension with an old employer which pays out around £4000 next year and I was considering transferring that. None of the pension transfer specialists I spoke to would quote less than £5k for even looking at it which made me see that maybe it would not be such a great idea considering the transfer value was only £65k. Also any IFA would have to look at your finances as a whole which is expensive and time consuming. They have to do that though to advise whether it is better to keep it or transfer it with the assumption you may withdraw the whole lot.
    Early retired in December 2017

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