DB pension transfer to sipp or current employers DC?

Justabloke63

Hi Albemarle, yes I really meant the lowest risk investment within the wrapper of a sipp. The workplace pension has a range of investment options but not knowing too much about it I just chose the default low risk option. 

tetrarch

Justabloke63 said:

Hi all, 
First Post so please be gentle! I was hoping for and would be very grateful for, guidance on transferring an old DB scheme.
I am 57 years old
If I took the defined benefits now they have offered £1523 p. a. and a lump sum of £10153 or no lump sum and £1809 p. a.
Or a CETV of £70,350

Reading between the data you have provided you have a debt of £40,000 to service. If you were to remortgage to the age of 67 then a £40K repayment mortgage would cost you £377 per month or £4,524 per year. With the correct penalty-free account there is no reason why you can’t pay it off as and when you are able. 

My personal preference is for an offset mortgage as these give you the ability to maximise your repayments by minimising you’re interest bill. That said, these best suited are for cautious, financially disciplined individuals (this sounds like you) . This would give you the ability to stretch out your debt repayment window without sacrificing your lifetime income from your DB pension.

Regards

Tet

Justabloke63

Hi Tet,
Thanks for your comments. My mortgage runs til age 70 and is slightly lower than £377 per month. Also I have a small loan. I'm overpaying on the mortgage by £200 per month but if given the chance I would pay it off as soon as poss. I'm not sure I can face working for more than another couple of years - full time at least. As I have 3 other small DB pensions which kick in when I'm 60 then I thought that sacrificing the DB of £1523 p.a. wouldn't be so bad if I can pay everything off with a CETV of £70k and have some cash left over. I'll see what the IFA says, I'll lay it all out before him and I guess ultimately his advice should be the right way forward. I did look at offset mortgages years ago and decided to keep things as simple as possible. Thanks again,

Regards
JAB63