Shocked

Benny2020

Just turned 55 and thinking about early retirement so thought I would enquire about my pensions.

I have a deferred pension from BAE that will pay £15900 from 60 and am currently employed with a FS pension that currently stands at about £6000 at 65 but am still paying in obviously.

Don't want to work until 60 or 65 so BAE is now £10860 to take now and Current one £4200 now.

Heres the shocking bit (to me) Online workplace pension website shows alternate CETV at £191,000 and just got a quote back from my deferred pension giving a CETV of £651,000, also have a SIPP with £10,000 in.

So I have £850k on offer, what do I do and who would handle the transfers, I think my current workplace would handle the current one but what about the deferred one?

If I took £200k tax free and £650k in a SIPP could I make a good income?

The amounts have come as a shock to me and am thinking early retirement might be closer that I thought.

Dazed_and_C0nfused

Why would you want to give up the security and guaranteed income of both DB schemes??

How would you feel if having paid say £5-10k to get the legally required advice and you transferred there was a market crash and your £850k was suddenly only say £600k?

Benny2020

Because I want to retire early and not at 60 or 65 and that is a lot of money, if I retired now and took the income it would be £15k per year and no lump sum or £210,000 lump and £640,000 to invest.

lisyloo

You would have to pay for financial advice if you want to transfer, there is no choice on that,  No one will transfer it for you without that advice (and if they say they will it’s a scam).
There are pros and cons so if it were me I’d start trying to get recommendations for a good ifa and getting an idea of how much I want to live on (ifa will ask you that). I can recommend one if you are in the West Country.

Dazed_and_C0nfused

Benny2020 said:

Because I want to retire early and not at 60 or 65 and that is a lot of money, if I retired now and took the income it would be £15k per year and no lump sum or £210,000 lump and £640,000 to invest.

Why would take the £210k up front?

What would you be doing with it?

An alternative could be take the £191k and use that over the period to State Pension age.  Larger drawdown initially then reduced from 60 when you can get the deferred pension with no reduction.

You should also look at your State Pension forecast on gov.uk to see what impact retiring early will have on this.  You must read past the likely headline of £168.60/week.

lisyloo

An ifa should tell you that if you don’t have enough state pension years you can buy them fairly cheaply and it’s considered a no brainier.

Benny2020

Why wouldn't I take the tax free money?
I have thought about taking the smaller CETV (191k) and leaving the other one.
My state pension forecast is £156 at 67.
£850k is a hell of a lot of money and much more than I was expecting.
Who would handle the transfer, I am in Lincolnshire.

Andrew31

Analysis and advice of this magnitude can not be given on a forum.  Anyone say it is a good idea or a bad idea doesn't really know.     Speak to an IFA, who will be able to take all your financial details and give you advice on if transfer is right for you.   You haven't even given enough basic info to make a comment.  e.g. you have said how much income you need in retirement.   

Start looking for proper advice not "forum advice" 

lisyloo

you Should take the tax free money, but taking it in one go means that you won’t then be able to protect it from tax e.g. it will exceed your isa allowance, so if you don’t have immediate plans for it, then it would make more sense to keep it in a tax free wrapper and tax it out later. As a simple example you might be able to take a bit each year within the isa allowance.

£850k is a very nice pension, but it’s comfortable, well-off not rich when you divide it by 35 or 40 yers. Investment performance and inflation as well as longevity are risks that you are not immune to even with that amount.
btw - is that just for you or for two people.
id say it’s great for one person but not so amazing for a couple.

its certainly a hell of a lot of money to make a bad decision on and no offence but you are asking some very basic questions and it’s a complex subject so you definitely need professional advice.

be aware that there are some very sophisticated scams on that’s another reason to get an ifa.

SonOf

Benny2020 said:

Why wouldn't I take the tax free money?
I have thought about taking the smaller CETV (191k) and leaving the other one.
My state pension forecast is £156 at 67.
£850k is a hell of a lot of money and much more than I was expecting.
Who would handle the transfer, I am in Lincolnshire.

You shouldnt take the 25% tfc unless you have justification for doing so.   Its wasted if you take it up front (without justification).  It can be used in better ways for most people.

£850k is a lot of money.  However, you are giving up security for fluctuating values and investment risk.  Assuming a typical risk profile, you will see losses of around 20% at times.  How would you feel about losing £170,000 of your pension value in a routine crash?      Do you have experience of running investments on a £850k portfolio?
Common sense should be that you factor in losses and take an income that is sustainable.  The younger you are, the lower the income should be.  The lower the investment risk, the lower the income should be.  You have inflation to consider and not just the income you need.

It may be that transferring is a suitable option. For most it is not.   You are giving up an annually increasing guaranteed income for life in exchange for a lump sum that will be subject to investment returns and have periods of sustained losses that can mean you need to adjust your income downwards periodically. You will also need to accept the investment risks (many cant on sums that size) and have good money management.
Whatever happens, you will need an IFA to do this.

blisteringblue

Benny, do what is best for you.  I did exactly what you are thinking about 2 years ago and cashed in 2 good CETVs.  I gave up 9K @ 60 and £4K at 65 for best part of 500K.  My current pension went DC back in 2006 when our company was sold so I also have that, another DB (4K) at 65 and full state pension.

I am retiring the day I turn 55 years old, which has been my plan since my father had a heart attack in the early 90s.   The CETVs are the only way I can do this.    There has to be a value to retiring early too, people seem to forget that when say transfers are always a bad idea.

Yes you need to understand the risks but it's not the "why would you ever consider this?" you get everytime this question is asked.

Do what is best for you, but understand what you are giving up.