Transfer valuation from DB Pension - advice

Mick70

Or in my head (and I could be wrong) he wouldn’t be managing it going forward , Royal London would , so only pay a fee for initial transfer advice , to transfer or not.

jamesd

Royal London don't do the sort of management involved though strictly it's not too hard to learn.

Mick70

I contacted the advisor our company uses (he is based south , whereas i am up north) , anyway i emailed him all the info the DB pension company sent me and he will look into it

just has me wondering, should i be seeking out a 2nd advisor (local) just purely for an assessment if the deal is a fgood one or not and if it is in my best interests ? i realise that if do this its going to cost me a few thousand pounds though out of my pocket.

what would you guys do regarding this ? - seek out more advice or hang tight and see what the company advisor says , eventhough he is at the other end of the country to me

ManMadeWays

Mick70, I have done this, at 54 ish I was offered Circa 50 times my annual Pension as a buy out.


I did this primarily to 1. withdraw the TFC for house deposits for my children and 2. leave a cashpot as a legacy.



Subject to investment returns I could take the equivalent of the DB pension, but I could actually live comfortably with a lower amount - and avoid being a Higher Rate Taxpayer when State pension kicks in.


I have joined my companies DC scheme and pay in 6%, company pays 12%. I don't strictly need to do this as I am way over the Lifetime Allownace, but it come with valuable life insurance.


I intend to work full time until 60 as enjoy my work, maybe go part time then. I have got the back up of my wifes NHS Pension if it all goes wrong !



Either way its nerve wracking but I know a dozen or more current and ex colleagues and none have regretted it yet.



Max out ISA's as well if you can afford to.


I paid 0.6% in initial and on going fees, but take an interest in fund selection.


Good Luck,



also JamesD comments are very interesting I have saved them to discuss with my IFA as we have not yet discussed any withdrawals.

jamesd

Mick70 wrote: »

just has me wondering, should i be seeking out a 2nd advisor (local) just purely for an assessment if the deal is a fgood one or not and if it is in my best interests ? ... what would you guys do regarding this ? - seek out more advice or hang tight and see what the company advisor says , eventhough he is at the other end of the country to me

It's a great deal and will, barring very unlikely events, make you much better off financially. And it's easy to protect against those events.

But whether it is in your best interests depends on those interests and your weighting of their relative importance. As you've seen, there are people who prefer simplicity and half as much with worse spousal benefit. Some of those just couldn't handle stock market ups and downs even when state pension deferral and some annuity buying might make it irrelevant for their core income needs.

I can explain the theory and potential but only you can assess your interests and their relative importance.

jamesd

ManMadeWays wrote: »

also JamesD comments are very interesting I have saved them to discuss with my IFA as we have not yet discussed any withdrawals.

Expect the inheritance discussion to be interesting. Pensions are typically regarded as great for inheritance but with the deposits you demonstrated a propensity for giving while alive.

I tend to prefer the while alive approach because the recipients can benefit for longer and often more.

If there's enough money you could offer whole mortgages, not just deposits. Real mortgages, lending to them secured on their property but maybe on nicer terms.

ManMadeWays

If there's enough money you could offer whole mortgages, not just deposits. Real mortgages, lending to them secured on their property but maybe on nicer terms.

James D Can I lend directly from the SIPP ? It's with Nucleus. Rather than take money out and get caught up in LTA/Crystalisation issues ?

Mick70

More great feedback, thanks guys

Dox

ManMadeWays wrote: »

James D Can I lend directly from the SIPP ? It's with Nucleus. Rather than take money out and get caught up in LTA/Crystalisation issues ?

You can indeed lend from your SIPP on the appropriate commercial terms (although you can't lend to yourself/your own business). Maximum you can lend is 50% of net value of SIPP.

ManMadeWays

One more thing, a work colleague whose wife had pre deceased him , had a CETV value of Circa £1m and sadly died before he actioned it leaving his 18 yo son with 4 * salary, circa £120k and a small residual pension until he was 21 instead of of the £1m, just another thing to think about....