Direct benefit pension transfer

HappyHarry

simonB2089 said:

Sorry it’s turned into a thread that allows financial advisers to justify their costs.
I thought it was a money saving forum

It is.

By not transferring your DB pension, you will save money, as you will not have to pay any adviser fees.

Better now?

If you are not aware, a similar thread appears every couple of days on this forum. It might be worth reading through a few of those to get an idea of why it can't be done on the cheap, regardless of your own circumstances.

eskbanker

simonB2089 said:

Sorry it’s turned into a thread that allows financial advisers to justify their costs.
I thought it was a money saving forum

It is a money-saving forum, which is why most would endorse your approach of shopping around if you're looking to decide based on price (or even if you're not tbf), but that doesn't conflict with posters explaining why costs aren't as trivial as you apparently expected them to be.

dunstonh

My individual circumstances have lead me to this conclusion.
Not being a feckless retiree

That is what they all say until they find themselves in that situation and then go looking to blame someone else.

Sorry it’s turned into a thread that allows financial advisers to justify their costs.
I thought it was a money saving forum

Understanding why something is the case is better than remaining ignorant.

Up the point you posted that, none of the responses were from FAs or IFAs.  They were from knowledgeable consumers who understand the issues.  

If you want to "save money", then leave the pension where it is.  It won't cost you a penny.  Job done.   

simonB2089

Thank you Oracle I’m not worthy💨

Brynsam

simonB2089 said:

Hi I’m looking to transfer a defined benefit pension to dive s more flexibility.
The laws is that as funds are over £30K you must get IFA advise.
I have contacted a couple of advisers so far any they are wanting to relieve me of a sizeable portion of my pension for the privilege of giving advise.
Does anyone know of a route where advise can be given complying with Legislation And making a viable option without  damaging  your transfer value.
thanks

No such route - the costs of PI for the hapless financial adviser giving the advice has ensured that costs are high (but giving advice on DB transfers is about the highest risk advice around). As someone has already said, pay the costs yourself and not out of the fund, and your transfer value stays intact with all its tax benefits.

dunstonh

pay the costs yourself and not out of the fund, and your transfer value stays intact with all its tax benefits.

Actually, paying the fee out of the pension and then putting the equivalent amount of the fee into the pension is more tax-efficient (subject to annual allowance being available).     That way you get tax relief on the fee.

jamesd

HappyHarry said:

simonB2089 said:

Sorry it’s turned into a thread that allows financial advisers to justify their costs.
I thought it was a money saving forum

It is.

By not transferring your DB pension, you will save money, as you will not have to pay any adviser fees.

Better now?

Not better because transferring today will normally provide a higher income and for some of the best candidates - reduced life expectancy - a higher guaranteed income. Getting more money can be worth the cost. So can the other  benefits of transferring.

jamesd

simonB2089 said:

Hi I’m looking to transfer a defined benefit pension to dive s more flexibility.
The laws is that as funds are over £30K you must get IFA advise.
I have contacted a couple of advisers so far any they are wanting to relieve me of a sizeable portion of my pension for the privilege of giving advise.
Does anyone know of a route where advise can be given complying with Legislation And making a viable option without  damaging  your transfer value.

The advice will always be expensive but the price isn't fixed so shopping around can be useful.

Less tangible things like your reasons for transferring can matter. If you've been told that you're going to die within a year you can get 100% of the transferred money out tax free  and this might pay for non-NHS treatment that could save your life or might be a far better death benefit than the DB offers. Such cases are likely to be welcomed because of the risk profile of the work. How you pitch it - why you want to transfer - can also matter.

The FCA has been consulting on a possibly cheaper limited advice product where the only permitted advice is that it's not in the interest of the person to transfer. Obvious transfer is best cases like imminent death with poor benefits would have to use full advice. Unclear whether limited advice would meet the legal requirement to allow a transfer.

phillw

jamesd said:
The FCA has been consulting on a possibly cheaper limited advice product where the only permitted advice is that it's not in the interest of the person to transfer.

That is basically the advice that you currently get. As soon as it says Defined Benefit then IFA's will stop reading because a guarantee is seen as an absolute that must never be traded away. Even if the guarantee is at a value that is completely worthless compared to the transfer value. Currently the IFA has been left on the hook if they advised against the transfer, but was willing to help you transfer.
I think the FCA are thinking about preventing you suing an IFA for not doing enough to stop you.

Brynsam

dunstonh said:

pay the costs yourself and not out of the fund, and your transfer value stays intact with all its tax benefits.

Actually, paying the fee out of the pension and then putting the equivalent amount of the fee into the pension is more tax-efficient (subject to annual allowance being available).     That way you get tax relief on the fee.

You are of course correct but as OP was asking, somewhat belligerently, about protecting the transfer value... need I say more?