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

coyrls

eskbanker wrote: »

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

Good point, I missed the "we". As you say it needs to be clarified.

happyandcontented

eskbanker wrote: »

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

Unfortunately, both are held by one spouse.

happyandcontented

Andrew31 wrote: »

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.

Unfortunately, that is not available to us, we have looked into that.

I am not sure what you mean here?

happyandcontented

Mick70 wrote: »

what was the DB figure to compare ?

£20,000 at 60, £25,000 at 65

Andrew31

what fixed protection is not available to you.

can you explain why?

Turpinr

Yes this is a normal reaction, but the statistics show that someone who has reached 60 and is in good health , no money problems, non manual job etc will have a 50% chance of living until their late 80's , so a 50% chance of living longer . As a couple there is around a 25% chance one of you will still be alive at 95.

And what of people in manual jobs who have final salary pensions??

bostonerimus

With such a big decision to make this is one of the times when financial advice is useful for many people. There are numerous, often competing, factors to consider such as life span, family circumstances, death benefits, inheritance, taxation, investment management and your retirement life style goals. However, make sure any advice is truly independent ie the person giving the advice has no vested interest in advising you one way or the other.

grocerjack

I'm similar and going through the risk process etc now. I have a pot of about £850k and my wife has around £250k from her previous employment with a local authority. If I take the 25% it would pay off our mortgage 12 years early plus our little bit of credit card debt and a loan. We'd be £1600pm better off and I'm still working and paying into a DC fund which i pay 5% salary into and the company pays 10%. I'm 7 years from state pension age as well. The house is around £550k so it would be good security as any redundancy this late in my career would probably mean looking at early retirement and maybe a part time local job. I get that stats say we all live longer, but stats don't guarantee that. The killer for me was that if my wife and me were killed tomorrow, my pension would die with me and my kids would barely see a penny as they're in their 20s and out of full time education. In a SIPP I can arrange for them to inherit the money. I've taken a bit of time to look into this, and yes there is some risk, and some costs, but you might also end up with a bigger pot if the investments work properly. And we take risks every day and mitigate them accordingly. I take the view that my SIPP will be concentrating on medium risk/return only...at my age and with potentially £620k left, plus a DC pension looking healthy I don't need to run high risk/return chances. It's an emotive subject, and each to their own, but my DB scheme was shut 10 years ago and the company are managing the deficit but not much else. The CETV value was very generous, presumably because it's one less person to worry about. I also know several friends who have done similar in their late 50s and early 60s and none regret it. I'm not recommending it, but having researched this it looks right for me. If I live to be a 100 then I might lose out, but being honest that's against the odds..and even if I do I might not care..or even know.

By the way, the criteria is quite tough and you are checked rigorously through questionnaires and interviews (at least I have been) as to whether you are advised to transfer out. It's pretty good due diligence really to ensure you're of sound mind, understand the risks and aren't being led by someone else

Good luck whatever you decide, GJ

happyandcontented

Andrew31 wrote: »

what fixed protection is not available to you.

can you explain why?

As we understand it ( and as we were advised) because pension contributions were made after a specific date in 2016 no protection is available to us.

bostonerimus

grocerjack wrote: »

I'm similar and going through the risk process etc now. I have a pot of about £850k and my wife has around £250k from her previous employment with a local authority. If I take the 25% it would pay off our mortgage 12 years early plus our little bit of credit card debt and a loan.

Why are you carrying this debt at all? If you are paying regular interest rates on it you should pay it off.

I get that stats say we all live longer, but stats don't guarantee that.

No they just say that there is a certain probability that something will occur. You must always plan for reasonably probable scenarios....and for people in the UK you age that's living well into you 90s, maybe even 100.

The killer for me was that if my wife and me were killed tomorrow, my pension would die with me and my kids would barely see a penny as they're in their 20s and out of full time education.

This is what life insurance is for.

In a SIPP I can arrange for them to inherit the money. I've taken a bit of time to look into this, and yes there is some risk, and some costs, but you might also end up with a bigger pot if the investments work properly.

The primary function of a pension is to fund retirement, not provide an inheritance pot. The inheritance might be a nice extra if things go well, but it should not be a driving factor in most people's retirement as they don't have a large pension pot surplus when compared with the income they need to generate and the risks involved.

And we take risks every day and mitigate them accordingly. I take the view that my SIPP will be concentrating on medium risk/return only...at my age and with potentially £620k left, plus a DC pension looking healthy I don't need to run high risk/return chances.

Return/risk and portfolios have to be balanced against income needs, sequence of return risk, inflation and inheritance. Sometimes people are too conservative.

It's an emotive subject, and each to their own, but my DB scheme was shut 10 years ago and the company are managing the deficit but not much else. The CETV value was very generous, presumably because it's one less person to worry about. I also know several friends who have done similar in their late 50s and early 60s and none regret it. I'm not recommending it, but having researched this it looks right for me. If I live to be a 100 then I might lose out, but being honest that's against the odds..and even if I do I might not care..or even know.

For a male and female couple in their 60s today there's over a 10% chance that one of you will live to 100. So your plan should include that. Also anyone doing CETV will not have experienced a market crash yet and you should check in with your friends when stock prices decrease by 30% or more just before they have to make a withdrawal if they haven't planed for that.