Transfer Final salary questions.

jimi_man

garmeg said:

jimi_man said:

£16k a year, with 2% inflation until 88 gives just under £600k. Personally I'd want more than that to make up for the lack of security. 

£448k seems rather low. 

Not comparing like with like. The lump sum is now whereas the pension amount is, on average, 15 years in the future.

I agree the CETV is low. I was offered £400k for a 9k early retirement pension with an NRA of 62. I declined the offer.

Agreed. I wasn't so much comparing, as showing what the DB pension provides over a lifetime. I suppose the key is what sort of income £448k could provide and for how long. 

BritishInvestor

Thrugelmir said:

Albermarle said:

Heisenberg01 said:

Got my CETV finally end of last week, bit under what I was expecting,448k versus 16k (ish) at 60.

Still can't make up my mind!

Heisenberg01 said:

Got my CETV finally end of last week, bit under what I was expecting,448k versus 16k (ish) at 60.

Still can't make up my mind!

By coincidence I had almost exactly the same offer- £447K for £16k(ish)  . However my NRA was at 65 , so from that point of view your offer your offer is worse. On the other hand my DB pension conditions - increasing with RPI ( max 5%) and two thirds spouse pension are quite good. 
I did not take it for the usual reasons but also because I already have a substantial DC pot ( the DB pension is from past employment ) so did not make sense to put all my eggs in one basket. 

RPI linkage is a usefull insurance in times of potentially poorly performing markets and a risk of inflationary pressures. 

But surely depends on how the linking is structured - i.e. capped or not?

cfw1994

jimi_man said:

£16k a year, with 2% inflation until 88 gives just under £600k. Personally I'd want more than that to make up for the lack of security. 

£448k seems rather low. 

Indeed: if you assumed 2% growth on whatever is in the pot each year, 448K would peter out after about 30 years.
Of course, if you managed 3%, you get another 7 years from it.....& also, if your state pension means you don't need as much from "the pot", you can either spend a bit more earlier, or leave a tidy inheritance.
Decisions decisions!

Thrugelmir

BritishInvestor said:

Thrugelmir said:

Albermarle said:

Heisenberg01 said:

Got my CETV finally end of last week, bit under what I was expecting,448k versus 16k (ish) at 60.

Still can't make up my mind!

Heisenberg01 said:

Got my CETV finally end of last week, bit under what I was expecting,448k versus 16k (ish) at 60.

Still can't make up my mind!

By coincidence I had almost exactly the same offer- £447K for £16k(ish)  . However my NRA was at 65 , so from that point of view your offer your offer is worse. On the other hand my DB pension conditions - increasing with RPI ( max 5%) and two thirds spouse pension are quite good. 
I did not take it for the usual reasons but also because I already have a substantial DC pot ( the DB pension is from past employment ) so did not make sense to put all my eggs in one basket. 

RPI linkage is a usefull insurance in times of potentially poorly performing markets and a risk of inflationary pressures. 

But surely depends on how the linking is structured - i.e. capped or not?

Even the caps tend to be well above inflation rates experienced in the UK for a very long time. 

Heisenberg01

Seems I'm looking at 7-10k to set up (payable upfront),and 1% of portfolio per annum  for management.

Does this seem reasonable/ going rate?

BritishInvestor

Heisenberg01 said:

Seems I'm looking at 7-10k to set up (payable upfront),and 1% of portfolio per annum  for management.

Does this seem reasonable/ going rate?

Upfront seems ballpark. 1% ongoing on a pot of £448k (if read you posts correctly) is at the higher end, so if you're paying this I would expect a lot more than an annual visit to discuss how the funds have performed. Might be worth digging a bit more on this.

Heisenberg01

Seems I won't be transfering anytime soon then, don't have a spare 10k,and I'm not going into debt for it.