Questions re transfer from DB scheme

blisteringblue

sammyjammy wrote: »

Unless you upskill your knowledge a huge amount no IFA is going to recommend a transfer out.

Of course they are going to, I did exactly the same as the op and he is getting very good multiple on 9k @ 60.

I got 35x and 50x my deferred DB pension 18 months ago. In my case it was 4Kpa @ 65 and 6kpa @ 60. I now have a good pot to allow me to retire at 55 in 3 years time. There was absolutely no way I could do this with the DB. My current live pension went DC back in 2006 so I'm fully aware what the market can do.

I've a backstop of another 5K DB @65 and full state pension @67. My transfer value just wasn't good enough on that one so I left it.

You need a good IFA and one you have confidence in. I'm not an investor but I have some mainstream funds (cat 2 risk) which have ticked up a little in these bad times so I'm still on course.

Worse case and we are hit with a recession in the run up I just work for another year or try and get 18 months cash saved up between now and retirement, but I'm throwing as much as I can into the pension via Salary Sacrifice.

DB Transfer isn't for everybody I admit but they also are not the blatant rip off people seem to make out.

coyrls

HandyMandy wrote: »

Coyrls, I’ve been told (by others who have already transferred out of my scheme) you can only transfer before age 55 if you buddy up with someone who is also transferring.

They might be referring to a block transfer that preserves entitlement to non-standard tax free lump sums and early retirement ages but I don't think current age is a factor with block transfers. It sounds like they might be mixing things up. As Joe Crystal says, why don't you get the information from the horse's mouth?

Albermarle

Unless you upskill your knowledge a huge amount no IFA is going to recommend a transfer out.

The pension transfer specialist will analyse the current DB pension against the transfer value , using some set parameters of potential investment returns, cash flow etc .
The fact that the client is not particularly knowledgeable about investing will not affect the calculations , so a positive transfer recommendation would still be perfectly possible .
In reality the IFA will advise the client that they should pay for professional management of the funds if they transfer, and no doubt offer their own services .

bostonerimus

If you transfer fom a DB pension into a DC pension arrangement you or your IFA will have to decide how to invest your money for drawdown. That will usually involve you buying some investment funds so that you can get income from a combination of their growth and your capital. So you just need to understand the basics of investing. Here are a series of 5 videos that take you through the basics of simple index investing. There are other approaches, but index investing is a good place to start, and often where experienced investors end up after trying other schemes

https://www.youtube.com/watch?v=gM4KEJQ_Z5U

[Deleted User]

It is prudent and right to explore the options available to you, Mandy.

Everybody should consider the choices in front of them imo.

On this board, you will get a range of advice that I'll wager is more informed and balanced than the advice of any IFA, even if you stumble across a good one.

But the process is a bit of a mess at the moment, in need of reform, and you do not have to commit at 55.

Keep tabs on the board, keep asking questions (there are very generous responders) and, basically, know your target before you hire a gunslinger.

sandsy

Albermarle wrote: »

The pension transfer specialist will analyse the current DB pension against the transfer value , using some set parameters of potential investment returns, cash flow etc .
The fact that the client is not particularly knowledgeable about investing will not affect the calculations , so a positive transfer recommendation would still be perfectly possible .
In reality the IFA will advise the client that they should pay for professional management of the funds if they transfer, and no doubt offer their own services .

But don't forget that a key aspect of giving suitable advice is that the pension transfer specialist has to consider the client's knowledge and experience.

mgdavid

HMandy, that £9700 per annum figure for your DB pension, is that what they forecast when you left in 2010, or a more recent forecast, and does it take into account the annual increases which normally will be either CPI or RPI?

[Deleted User]

Lots of good advice in this thread. Also, one piece of bad advice

You need a good IFA and one you have confidence in.

Beware of any IFA who fills you with confidence. Those are the worst. And if you hear public school accent... Run.

An adviser who has doubts and makes you question things is the one you need, but those are few and far between. As others have said, you need to learn enough to make an informed decision. It’s your money, so always your decision and impact on your life rather than IFA’s.

Before you go for advice read a few books, starting with something simple. Like John Edwards DIY pensions.

Parking_Trouble

I doubt there is a more comprehensive source of pensions and investment information than on this forum. Possibly too much!

The OP needs to do lots of research to learn the pros and cons of transferring out of a DB scheme. It doesn't suit everyone and in most cases it is not sensible to give up an index linked DB pension.

Learn all you can about it before engaging an IFA. The report they produce is mostly incomprehensible and uses forecasts (using mandatory percentages) that everyone says are meaningless.

Many of my peers at work transferred out £1m+ amounts. That wasn't for me. I like a safe monthly, index linked income that I don't have to think about.
We did transfer my wife's DB pension into a SIPP for which the IFA takes money for doing nothing and we have savings which I manage myself but with limited knowledge.

But it's all down to personal circumstances, personal choices, understanding the levers and being able to feel financially secure.

Parking_Trouble

bostonerimus wrote: »

Here are a series of 5 videos that take you through the basics of simple index investing. There are other approaches, but index investing is a good place to start, and often where experienced investors end up after trying other schemes

https://www.youtube.com/watch?v=gM4KEJQ_Z5U

An extremely simple but workable strategy for investment simpletons like me.
Very few views per video since 2016. He could have made one 15 minute video to get the message across and avoid all the repetition.