DB scheme closing, advice?

PPE1

I've been advised my works final salary pension is closing. I've been paying in £75 for 14 years I am 43.
Any advice on what I can expect, payout? Or what I should be doing while I look for a IFA?

thanks

JoeCrystal

If you have been a member of the DB pension scheme for 14 years, you really ought to know how much you are expecting by now. The final salary DB pension tends to be based on the numbers of the year, the accrual rates and the final salary which all varies a lot so really, you are the only one who can answer that question yourself.  What do your annual statements / scheme booklets say for a start?  Do you know what your employer is replacing it with? If it is a DC pension scheme, then you are better off paying into that to take advantage of the employer's contribution on top. Why do you need an IFA anyway? Surely you can keep contributing to the employer DC pension scheme? But be warned, the contributions rate from the employer would never remotely come close to the value of the DB pension scheme unless it is 25% to 33% of your salary overall. 

AnotherJoe

Why would you be looking for an IFA? Not sure why you think you need one. And at£75 (a month?) they wouldn't be interested anyway. 

Your company can tell you what you've accrued so far in terms of final salary. It's possibly not even related to your £75. 

Your company  will be replacing the DB with DC almost certainly it would be madness to do anything else other  than go with that since otherwise you won't get the company contribution. 

tacpot12

You don't need an IFA. You need to find out what you are projected to receive from the DB scheme currently. This amount will increase due to inflation, but will not increase due to any further time you spend with the company. The new DC scheme will increase with inflation and with the time you spend with the company, but starting from a zero point.

Don't worry too much about this as a property invested and properly funded DC scheme is capable of being a good pension. It will cost you more than £75/month - this is why the company is making the change, they want you to pay more towards your pension. At 43 you have plenty of time to contribute to a DC pension and should maximise the amount you put into it to get the tax relief. Invest in the most risky fund you can - it will be moderately risky compared to what you might invest in outside of the company scheme...

shinytop

Same thing happened to me.  Pay in as much to your scheme's replacement as you can afford.  Start with the default investments to start with, which at age 43 should be something mostly equities based and well diversified. Learn a bit more about pensions/investment then change if you want.  That's what I did anyway and it worked for me.  14 years in a DB scheme is a good foundation to build on. 

Brynsam

PPE1 said:

I've been advised my works final salary pension is closing. I've been paying in £75 for 14 years I am 43.
Any advice on what I can expect, payout? Or what I should be doing while I look for a IFA?

thanks

Have you read any information relating to this scheme? I suspect it probably hasn't been top of the reading list, which is understandable - but nobody here can guess what benefits your scheme provides, not least because you don't give any indication of your earnings. You will receive a statement from the scheme as at the date of closure and that will show you the benefits built up to date. These will revalue (increase) between now and time you draw your benefits, but nobody can predict what they will eventually be.