Could anyone comment on taking a CETV who has done it??

[Deleted User]

I took CETV in early 2017. The value was about half of yours. We do have a bit more DB income remaining compared to you having just the 2 state pensions but the key consideration was that it was a medium sized private company and I don’t trust it to be in business for the next 40 years.

Albermarle

From the ONS:
Life expectancy at age 65 years was 18.6 years for males and 21.0 years for females, with an improvement of 4.7 weeks for both sexes in comparison with 2015 to 2017.

The projections going forward ( rather than actual data ) and the data the actuary's use is even a little bit more optimistic than this - 20 years and 23 years respectively .
Plus of course this is an average so 50% will live longer .

happyandcontented

bostonerimus wrote: »

I'm also doing well with the CETV I took 5 years ago. It's growing by 8% a year so far and so actuarially I'm ahead of the DB pension. But there are so many unknowns and probably at least 25 years to go before I find out which was the most lucrative choice... and I'll be dead, so it's a moot question. There will be plenty of down years, but I'm sure I made the right choice, given my income requirements and circumstances, even if ends up not being the most lucrative. However, it's different for everyone.

Do you self manage the fund to get the 8%?

GSP

My take:
With those numbers, leave NOW and enjoy yourselves.
Buy that dream home.
With SP kicking in in the not too distant you will survive okay.
You are fortunate to be in this position, take it now!

Mick70

what was the DB figure to compare ?

coyrls

With a DB CETV of £800K and a DC pot of £400K, you will be over the Life Time Allowance if you take the CETV and will be liable for additional tax on £200K. You need to factor this in to any comparison.

eskbanker

coyrls wrote: »

With a DB CETV of £800K and a DC pot of £400K, you will be over the Life Time Allowance if you take the CETV and will be liable for additional tax on £200K. You need to factor this in to any comparison.

OP didn't really make it clear but it could be that these are one each rather than both being held by just one of the couple:

happyandcontented wrote: »

Our position is that we have 400k in a DC pot and a CETV on a DB pension of around 800k.

As you rightly say, it could make a material difference so needs to be clarified!

Andrew31

As you have 800k in a DB pot, if you want to move it to DC, you will have to take advice.

You will never be able to get suitable advice on this forum and often a lot of misinformation.

One thing you should do that no one has mentioned is apply for Fixed Protection, if you haven't done so already.

I suggest you see an adviser. Also get your pension protection sorted out if you have already.

bostonerimus

happyandcontented wrote: »

Do you self manage the fund to get the 8%?

Well if you can describe just bunging it into a balanced multi-asset fund and doing literally nothing with it for five years as "self managing", then yes I do. Eight percent isn't a spectacular return given the markets for the last 5 years. I chose the investment fund as it contains both equity and bond funds and as an experiment to see if I could actually get more lifetime income (assuming an average lifespan) out of the CETV than the DB pension. I calculated that if I lived to age 83 and with 2% inflation, I'd have to grow my CETV by 6% a year to match the lifetime DB pension payments. Historically a 60/40 fund has a good chance of returning an average of 6%. This is a relatively small amount and I had secured my retirement income with another DB plan that I left alone so it's a bit of an academic experiment and not critical to my retirement. Also note that the 8% is a net figure after fund fees, I don't pay an advisor or platform fees so I get the whole 8%. If you have to pay platform and advisor fees you'll have to take those off.

TBC15

happyandcontented wrote: »

Would you mind explaining? If not, don't worry! It is the flexibility that has us prevaricating.

https://forums.moneysavingexpert.com/discussion/5640626/guaranteed-transfer-value:)