IFA - Pensions transfer specialist

JoeCrystal

Good luck, Mick70! If you do opt for DB pension, you can always pay it into a DC pension scheme. You are indeed very fortunate to have that kind of DB pension from the age of 50 and frankly, probably better off since you don't have to deal with all the ongoing issues with the DC pension schemes.

Mick70

SonOf said:

RL will accept it if the adviser puts it through their agency and accepts liability for the recommendation to use RL and the investments.    if the adviser wont do that, then RL won't accept it.

The IFA last night indicated it was a non starter , his manager was adamant it was a No

JoeCrystal

Mick70 said:

SonOf said:

RL will accept it if the adviser puts it through their agency and accepts liability for the recommendation to use RL and the investments.    if the adviser wont do that, then RL won't accept it.

The IFA last night indicated it was a non starter , his manager was adamant it was a No

They will be providing a proper report saying why it is a negative for the transfer right?

Mick70

JoeCrystal said:

Good luck, Mick70! If you do opt for DB pension, you can always pay it into a DC pension scheme. You are indeed very fortunate to have that kind of DB pension from the age of 50 and frankly, probably better off since you don't have to deal with all the ongoing issues with the DC pension schemes.

That was the main reason given , that providing I stay in employment I should be able to get all of my 26k DB pension into my DC pot , even though it will be taxed at 40%, the govt will add 20% and get the other 20% back when do tax return , so should be able to get it all into my dc pot it will just be out of sync that’s all . So in theory age 58/59, according to them I could then have a £32k DB , a dc pot of about 300k , and the 80k lump sum.
im assuming they are right about the tax parts.
Mick 

Dazed_and_C0nfused

Mick70 said:

JoeCrystal said:

Good luck, Mick70! If you do opt for DB pension, you can always pay it into a DC pension scheme. You are indeed very fortunate to have that kind of DB pension from the age of 50 and frankly, probably better off since you don't have to deal with all the ongoing issues with the DC pension schemes.

That was the main reason given , that providing I stay in employment I should be able to get all of my 26k DB pension into my DC pot , even though it will be taxed at 40%, the govt will add 20% and get the other 20% back when do tax return , so should be able to get it all into my dc pot it will just be out of sync that’s all . So in theory age 58/59, according to them I could then have a £32k DB , a dc pot of about 300k , and the 80k lump sum.
im assuming they are right about the tax parts.
Mick 

They aren't.

This is from a thread yesterday where a similar suggestion was made.

Tax relief on pension contributions doesn't achieve that outcome.
Round sum figures used for simplicity.
Gross pension income £6k taxed at 40% = £3,600 net income received.
£3,600 paid into a SIPP or other relief at source pension is grossed up to £4,500.
Basic rate band is increased by £4,500 making an extra £4,500 income taxable at 20% instead of 40% so possible tax savings of £900.
End result is the £6,000 pension has become £5,400 (pension fund of £4,500 plus tax saving of £900).
In niche circumstances the tax saving could be significantly higher but for most it will be a maximum of 20%, assuming sufficient higher rate tax had been paid in the first place.

Mick70

Dazed_and_C0nfused said:

Mick70 said:

JoeCrystal said:

Good luck, Mick70! If you do opt for DB pension, you can always pay it into a DC pension scheme. You are indeed very fortunate to have that kind of DB pension from the age of 50 and frankly, probably better off since you don't have to deal with all the ongoing issues with the DC pension schemes.

That was the main reason given , that providing I stay in employment I should be able to get all of my 26k DB pension into my DC pot , even though it will be taxed at 40%, the govt will add 20% and get the other 20% back when do tax return , so should be able to get it all into my dc pot it will just be out of sync that’s all . So in theory age 58/59, according to them I could then have a £32k DB , a dc pot of about 300k , and the 80k lump sum.
im assuming they are right about the tax parts.
Mick 

They aren't.

This is from a thread yesterday where a similar suggestion was made.

Tax relief on pension contributions doesn't achieve that outcome.
Round sum figures used for simplicity.
Gross pension income £6k taxed at 40% = £3,600 net income received.
£3,600 paid into a SIPP or other relief at source pension is grossed up to £4,500.
Basic rate band is increased by £4,500 making an extra £4,500 income taxable at 20% instead of 40% so possible tax savings of £900.
End result is the £6,000 pension has become £5,400 (pension fund of £4,500 plus tax saving of £900).
In niche circumstances the tax saving could be significantly higher but for most it will be a maximum of 20%, assuming sufficient higher rate tax had been paid in the first place.

ah right , I was under impression IF already 40% tax payer (and the impression they gave me) that you can get the full amount in pot ?  i,e to get £100 into your pot it should only cost you £60 ? (therefore getting the full 40% tax back)

Dazed_and_C0nfused

Mick70 said:

Dazed_and_C0nfused said:

Mick70 said:

JoeCrystal said:

Good luck, Mick70! If you do opt for DB pension, you can always pay it into a DC pension scheme. You are indeed very fortunate to have that kind of DB pension from the age of 50 and frankly, probably better off since you don't have to deal with all the ongoing issues with the DC pension schemes.

That was the main reason given , that providing I stay in employment I should be able to get all of my 26k DB pension into my DC pot , even though it will be taxed at 40%, the govt will add 20% and get the other 20% back when do tax return , so should be able to get it all into my dc pot it will just be out of sync that’s all . So in theory age 58/59, according to them I could then have a £32k DB , a dc pot of about 300k , and the 80k lump sum.
im assuming they are right about the tax parts.
Mick 

They aren't.

This is from a thread yesterday where a similar suggestion was made.

Tax relief on pension contributions doesn't achieve that outcome.
Round sum figures used for simplicity.
Gross pension income £6k taxed at 40% = £3,600 net income received.
£3,600 paid into a SIPP or other relief at source pension is grossed up to £4,500.
Basic rate band is increased by £4,500 making an extra £4,500 income taxable at 20% instead of 40% so possible tax savings of £900.
End result is the £6,000 pension has become £5,400 (pension fund of £4,500 plus tax saving of £900).
In niche circumstances the tax saving could be significantly higher but for most it will be a maximum of 20%, assuming sufficient higher rate tax had been paid in the first place.

ah right , I was under impression IF already 40% tax payer (and the impression they gave me) that you can get the full amount in pot ?  i,e to get £100 into your pot it should only cost you £60 ? (therefore getting the full 40% tax back)

You are forgetting that you are only getting 60% of the DB pension in the first place.

For simplicity we will assume that you are paying enough 40% tax that your increased basic rate tax band will result in a personal tax saving of 20% on all your DC contributions i.e. you will pay more tax at 20% and less at 40%.

DB pension is £26k less 40% tax = £15,600 net payment.

You pay that £15,600 into your DC pension fund.

The pension company add basic rate tax relief of £3,900 giving you a fund of £19,500.

Your basic rate band is increased from £37,500 to £57,000 and as a result you pay 20% tax on an additional £19,500 instead of 40%.  This saves you £3,900 in personal income tax.

End result is you have turned £26k into £23.4k.

Mick70

ah right, so you don't get the full amount back , bit misleading on some websites then 

ffacoffipawb

Dazed_and_C0nfused said:

Mick70 said:

Dazed_and_C0nfused said:

Mick70 said:

JoeCrystal said:

Good luck, Mick70! If you do opt for DB pension, you can always pay it into a DC pension scheme. You are indeed very fortunate to have that kind of DB pension from the age of 50 and frankly, probably better off since you don't have to deal with all the ongoing issues with the DC pension schemes.

That was the main reason given , that providing I stay in employment I should be able to get all of my 26k DB pension into my DC pot , even though it will be taxed at 40%, the govt will add 20% and get the other 20% back when do tax return , so should be able to get it all into my dc pot it will just be out of sync that’s all . So in theory age 58/59, according to them I could then have a £32k DB , a dc pot of about 300k , and the 80k lump sum.
im assuming they are right about the tax parts.
Mick 

They aren't.

This is from a thread yesterday where a similar suggestion was made.

Tax relief on pension contributions doesn't achieve that outcome.
Round sum figures used for simplicity.
Gross pension income £6k taxed at 40% = £3,600 net income received.
£3,600 paid into a SIPP or other relief at source pension is grossed up to £4,500.
Basic rate band is increased by £4,500 making an extra £4,500 income taxable at 20% instead of 40% so possible tax savings of £900.
End result is the £6,000 pension has become £5,400 (pension fund of £4,500 plus tax saving of £900).
In niche circumstances the tax saving could be significantly higher but for most it will be a maximum of 20%, assuming sufficient higher rate tax had been paid in the first place.

ah right , I was under impression IF already 40% tax payer (and the impression they gave me) that you can get the full amount in pot ?  i,e to get £100 into your pot it should only cost you £60 ? (therefore getting the full 40% tax back)

You are forgetting that you are only getting 60% of the DB pension in the first place.

For simplicity we will assume that you are paying enough 40% tax that your increased basic rate tax band will result in a personal tax saving of 20% on all your DC contributions i.e. you will pay more tax at 20% and less at 40%.

DB pension is £26k less 40% tax = £15,600 net payment.

You pay that £15,600 into your DC pension fund.

The pension company add basic rate tax relief of £3,900 giving you a fund of £19,500.

Your basic rate band is increased from £37,500 to £57,000 and as a result you pay 20% tax on an additional £19,500 instead of 40%.  This saves you £3,900 in personal income tax.

End result is you have turned £26k into £23.4k.

How about he salary sacrifices his salary down to £24k and gets a BR tax code on his pension as he is then a BR taxpayer. Does that improve the figures perhaps?

SonOf

Mick70 said:

SonOf said:

RL will accept it if the adviser puts it through their agency and accepts liability for the recommendation to use RL and the investments.    if the adviser wont do that, then RL won't accept it.

The IFA last night indicated it was a non starter , his manager was adamant it was a No

So, someone like AJ Bell then (who from other threads are reported to accept transfers with only the confirmation that you have received advice, even if it was negative.   And as the adviser firm cannot refuse to do give that confirmation, that may be a way for you to move it.