Could I cash in final my final salary pension

ypudding

I can access my final salary pension in 15 months time at the age of 50! (lucky me) However seriously considering asking for a transfer value, should this option be open to me under these circumstances. I know the current rules around actually getting your hands on pensions say you can do this at 55yr old.


Therefore my question IF anyone could actually answer this is could I request the transfer now at nearly 49yr old for the process to start, and could my pot be put into trust until I'm 55yrs old?


Should this be possible the pot is worth around 500k so I assume the transfer value to be easily 750k plus. I also assume there would also be the amount I should be paid from 50 to 55yrs old index linked. Another 120k added to the final amount. This could be a Del Boy selling the watch moment!!!

Dazed_and_confused

Which pension scheme is this? Not all DB schemes allow transfers out.

I know the current rules around actually getting your hands on pensions say you can do this at 55yr old.

There are some with protected rights to access it at 50. Which your opening paragraph implied you could do. So by transferring, if that's even possible, you would potentially be delaying access for 5 years. Not that accessing it at 50 is necessarily the right thing to do.

could my pot be put into trust until I'm 55yrs old?

Why do you want to do this? Don't recollect anyone ever asking this before on here? Who is the trust benefitting?

Should this be possible the pot is worth around 500k so I assume the transfer value to be easily 750k plus. I also assume there would also be the amount I should be paid from 50 to 55yrs old index linked. Another 120k added to the final amount.

As it is a final salary/DB pension there is no "pot".

Where are you getting the 500k figure from?

As far as I'm aware the CETV is a single figure. If it's £750k then that's it.

This could be a Del Boy selling the watch moment!!!

Other Only Fools and Horses lines spring to mind.

Dox

ypudding wrote: »

Therefore my question IF anyone could actually answer this is could I request the transfer now at nearly 49yr old for the process to start, and could my pot be put into trust until I'm 55yrs old?


Should this be possible the pot is worth around 500k so I assume the transfer value to be easily 750k plus. I also assume there would also be the amount I should be paid from 50 to 55yrs old index linked. Another 120k added to the final amount. This could be a Del Boy selling the watch moment!!!

If you are transferring out of a pension scheme, you can only transfer to another pension scheme. More info here about the different types of scheme structure: https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/legal-structure/

You seem very confused about the differences between a final salary scheme and a defined contribution (money purchase) arrangement. What is the £500K 'pot' you are talking about - the possible tax free lump sum?

You'll need to take financial advice (likely to cost upwards of £5K, always assuming you can find an adviser - make sure it is an independent - who is willing to take on your case and has the necessary FCA permissions to do so) and you certainly sound as if you need it. Do take care before taking any sort of decision.

ypudding

I vaguely remember the 500k being an estimate put on it when I left the company 3yrs ago. Though have read since taking a little more interest now that transfer values are at record highs due to guilt prices and interest rates. I also have an old article from the telegraph with an example of someone transferring their pension estimated to be around 500k, they received about 700k transfer value. I had 28yrs service in the old CEGB final salary scheme (ESP) I was earning 58k per annum then.


If I sound confused it's because I am!!! I have just started taking an interest due to the fact I am nearly 49yrs old and have read the process can take around 9-12 months.


I'm aware there are hefty costs involved. However I'm single and am not healthy. My children are all grown up and as I understand it my final salary pension would die with me should that ever happen! Whereas if I transferred out my estate would receive the money. It's as simple as that. I'm not interested in having a massive pension if I get to sitting in an old folks home at 80-90 yrs old.

JoeCrystal

ypudding wrote: »

I vaguely remember the 500k being an estimate put on it when I left the company 3yrs ago. Though have read since taking a little more interest now that transfer values are at record highs due to guilt prices and interest rates. I also have an old article from the telegraph with an example of someone transferring their pension estimated to be around 500k, they received about 700k transfer value. I had 28yrs service in the old CEGB final salary scheme (ESP) I was earning 58k per annum then.


If I sound confused it's because I am!!! I have just started taking an interest due to the fact I am nearly 49yrs old and have read the process can take around 9-12 months.


I'm aware there are hefty costs involved. However I'm single and am not healthy. My children are all grown up and as I understand it my final salary pension would die with me should that ever happen! Whereas if I transferred out my estate would receive the money. It's as simple as that. I'm not interested in having a massive pension if I get to sitting in an old folks home at 80-90 yrs old.

An estimate from three years ago is not good enough. Find out from your pension administrator for sure. Lastly, what is your predicted annual pension from 50 then?

Zero_Sum

What you can do with defined benefit pensions is commute some of it to a lump sum.
For example with mine, lets say i have an annual pension of £20k. I can turn a maximum of £5k of that into a £60k lump sum. And thats tax free.

If you try to take the lot, you'll get hammered in tax.

Mick70

I am in similar scenario , mine was triggered through redundancy and as I had protected persons status it triggers my DB pension when I reach 50 in few months time .
The DB gives you a salary guaranteed and possibly a lump sum .
The DC gives you a pot value that is invested by the pension provider , it is not index linked it will grow according to its performance , you can access it at 55.
Contact the trustees to see if can transfer and get an exact value . Then by law you have to contact an IFA to get advice on what to do and compare the two offers

Dox

Mick70 wrote: »

Contact the trustees to see if can transfer and get an exact value . Then by law you have to contact an IFA to get advice on what to do and compare the two offers

Get an IFA lined up before you make a formal request for a 'Cash Equivalent Transfer Value'. Your CETV is only valid for 3 months and you can't waste any of that time while you find an IFA.

Albermarle

I can access my final salary pension in 15 months time at the age of 50! (

Normally you can not transfer out of a final salary pension, less than 12 months before the NRA ( 'normal retirement age' )
So if 50 is the NRA , then you have a problem. If 50 is just the earliest that you can access it then you should be OK .
Transferring out of a pension that offers a guaranteed income for life , into one that is dependent on the financial markets is a big decision. Have a look at these links:
https://www.moneyobserver.com/final-salary-pension-transfers-scenarios-when-you-should-consider-transferring
https://www.royallondon.com/siteassets/site-docs/media-centre/good-with-your-money-guides/five-good-reasons-good-with-your-money-guide-2018-edition.pdf

LHW99

If you plan to continue to work, you could take the pension as is, and invest the income in ISAs which could be passed on to your children, now or when you do pass on.
Find out also what index linking is on the DB pension in payment, as well as the initial annual pension.

SonOf

This could be a Del Boy selling the watch moment!!!

Not at all. It sounds like someone determined to give the Treasury a late Christmas present. (25% tax free but the bulk of the rest subject to 45% income tax. i.e. losing nearly half of it).

So, at the moment, its more in line with the comedy failures of Del Boy