To transfer final salary pension or not?

Prism

rob3001 said:

fizio said:

rob3001 said:

Thrugelmir said:

When do intend making a decision as the 3 month window must be up shortly. 

I have got two weeks. Still no closer to making a decision.  Do I want the security of a £7000 /year with £46,000 lump sum or £110,000 lump sum and then expose £330,000 to the stock market over the next 15 - 20years with the hope of being able to drawdown £20,000 / year?    All I seem to be getting told is go for the safe option. Decisions decisions!

If you are reasonabally comfortable managing an investment portfolio then it seems like a no-brainer to take the CETV. I am in a similar position (though not as good as 50x) and the only reason i haven't done it is that its puts me over LTA so much of the gains are lost if paying 55% tax and the risks are still there

I am being advised by the experts and they are saying play safe.  If I am being honest with myself I am looking for a reason not to transfer out but I can’t find one apart from 7k (with a small increase every year) will be guaranteed for life. If I did transfer out it would probably go to the Royal London to manage

So have you confirmed that the advisor will transfer you to Royal London against their own advice? How about their fees which are usually significant for a transfer.

Albermarle

If I did transfer out it would probably go to the Royal London to manage

I understand from previous threads on the same topic , that Royal London will not normally accept 'insistent clients ' ie those advised to transfer but who still want to . 

There are a limited number of providers who will accept insistent clients .

but I can’t find one apart from 7k (with a small increase every year) 

The cost of inflation linking is very often underestimated . If you turn it on its head and check how much it would cost to buy a lifetime  annuity of £7K with and without inflation linking , the difference is around 100%

LHW99

Haven't read all this, but if you have a spouse, OP, how would they feel about having to run a self-invested pension? A DB usually has a guaranteed spouse pension attached.

hyperhypo

Picking up on LHW99 last post, that spousal pension is often % of full amount of annual db pension ie doesn't taken into account any PCLS you may have taken. Also, fwiw, i had very similar figures a couple of years ago now on a potential db transfer, multiplier of c. x35 at time of deferment, more like x 30 in today's money. I had a free report prepared which seemed to imply it was a good deal but stopped short of any recommendation. Amount was £423000 against c. 14000 pa at time of CETV , indexed to RPI capped at 10%.

I didn't proceed, preferred to continue to build up a DC pot to act as supplementary income to the DB scheme, due to commence in a couple of years. For my part choosing the mixture of the DB / DC route seemed sensible, not least as had no other significant guaranteed income ex. DB and SP.

BAXLEO

I was in a similar position and was advised to take the offer out of the DB scheme. 

My thinking was that if something was to happen to me before I retired or even after a couple of years the money I would have taken out would have been very little. Yes my wife would get a spouse pension of 50%. The rest of the pot stays with the insurance company. With taking it out of the DB scheme then if something was to happen to me the entire pot would goto my family. 

Suppose it is all about choice and decisions to suit yourself. 

You are dealing with Unknown’s how long are you going to live? Will the pension pot grow as much as you hope?
If we had these answers everything else would be simple. 

Malthusian

BAXLEO said:

I was in a similar position and was advised to take the offer out of the DB scheme. 

My thinking was that if something was to happen to me before I retired or even after a couple of years the money I would have taken out would have been very little. Yes my wife would get a spouse pension of 50%. The rest of the pot stays with the insurance company. With taking it out of the DB scheme then if something was to happen to me the entire pot would goto my family.

In itself that is not a reason to advise you to transfer unless you are terminally ill. Did you look into how much term and whole of life insurance would cost?

Clemmie12A

I am in the process of cashing in my final salary scheme as it doesnt meet my needs for flexible income and I have no spouse or dependants so it makes sense. My advisor has recommended it be set up with a SIPP wrapper but the investments will be managed by another company. 

daveyjp

BAXLEO said:

I was in a similar position and was advised to take the offer out of the DB scheme. 

My thinking was that if something was to happen to me before I retired or even after a couple of years the money I would have taken out would have been very little. Yes my wife would get a spouse pension of 50%. The rest of the pot stays with the insurance company. With taking it out of the DB scheme then if something was to happen to me the entire pot would goto my family. 

Suppose it is all about choice and decisions to suit yourself. 

You are dealing with Unknown’s how long are you going to live? Will the pension pot grow as much as you hope?
If we had these answers everything else would be simple. 

Were you at any point advised it is possible to have a guaranteed income with a DB pension and also provide a lump sum for your family should you die a few years after retirement?

Gig1968

I'm going to cash mine in for roughly the same reasons as you Clemmie. Just hope when I find an advisor they agree with me...

cloud_dog

You don't necessarily need the IFA to agree with you, you simply need the ability to provide evidence of taking appreciate advise.

I think AJ Bell are still taking on DB transfers.