Am I missing something ? DB pension transer to SIPP

jsinc

HamsterwheelMind said:

I shall have to read up about that. Thanks for the heads up. 

It just means that (using your numbers and ignoring fees) in 20 years 47k uninvested = 47k nominally (ignoring inflation) but 29k after inflation. In 20 years invested = 125k nominally but 76k after inflation.

i.e. Your later "Now then..." paragraph is correct nominally but not after inflation (in real terms). So you should compare nearly 2000 nominal with 125k nominal x annuity rate and/or 1167 real with 76k real x annuity rate. Which you might be doing but that's not clear from your post.

As you say, the variables and fees and specific inflation rate used matter. The transfer offer isn't necessarily bad but that decision is a personal thing.

p00hsticks

HamsterwheelMind said:

Please can I ask some financially minded people you read the following and tell me if I am missing anything;

I'm afraid your whole post rather raised my hackles - the obvious thing to me that you appear to be missing is giving your wife the opportunity to decide and handle what she wants to do with her pension.

You don't even talk about 'we' - it's  'I'll do this'  and 'I'll do that'. What does she think about it all ?

Even if she agrees with you in principle to the idea of transferring, it's going to have to be her who sits down with the FA to get the required pension specialist advice to facilitate the transfer, so she's going to need to be on top of the numbers, and it's no bad thing to be getting her to take some responsibility for her own financial affairs.

After all, you might not even be around by the time she needs to access it.....

garmeg

Dox said:

HamsterwheelMind said:

xylophone said:

When did your wife work for Natwest?
What exactly does your wife's statement of deferred benefits say in respect of GMP and excess?
How is the pension revaluing in deferment?
How is the pension index linked in payment?

I am afraid I do not have it in front of me. Will any of those details significantly change the general advice given in this threat and on this forum ? Considering the small amount. 

It won't change the gist of what's been said, but it might open your eyes to the happy chance that her pension could revalue by more than the 2.5% you are suggesting. That could well be the case if a large % of her pension is something known as Guaranteed Minimum Pension, which often revalues at a much higher rate than the rest of a pension. If she worked for NatWest before April 1997, she'll have a GMP.

On the other hand, if the pension has a fantastic rate of revaluation then this would / should be reflected in the transfer value being offered.

Personally, I would leave well alone as a small guaranteed extra.

LHW99

Don't forget to check what happens for each of you when the other finally passes on. Her DB may well give you a guaranteed 50% spouse pension, and there could be death in service benefits.

What happens for her if you pass first? There's no / very little inherited state pension now.

Dox

LHW99 said:

Don't forget to check what happens for each of you when the other finally passes on. Her DB may well give you a guaranteed 50% spouse pension, and there could be death in service benefits.

She's a deferred pensioner - so 'death in service' isn't going to apply.

Brynsam

garmeg said:

Dox said:

HamsterwheelMind said:

xylophone said:

When did your wife work for Natwest?
What exactly does your wife's statement of deferred benefits say in respect of GMP and excess?
How is the pension revaluing in deferment?
How is the pension index linked in payment?

I am afraid I do not have it in front of me. Will any of those details significantly change the general advice given in this threat and on this forum ? Considering the small amount. 

It won't change the gist of what's been said, but it might open your eyes to the happy chance that her pension could revalue by more than the 2.5% you are suggesting. That could well be the case if a large % of her pension is something known as Guaranteed Minimum Pension, which often revalues at a much higher rate than the rest of a pension. If she worked for NatWest before April 1997, she'll have a GMP.

On the other hand, if the pension has a fantastic rate of revaluation then this would / should be reflected in the transfer value being offered.

Indeed, but OP knows what the transfer value is. What he may not have correctly projected is what his wife's pension would be at retirement - hence Dox correctly pointing out that the revaluation rate could be better than OP currently thinks.

BobQ

Transferring a DC is  as you say easy since it is already cash.
Your keen approach to moving your wife's DB scheme to enable you to gamble with it is hopefully appreciated by your wife. In most cases transferring a DB pension is a bad idea.

shinytop

BobQ said:

Transferring a DC is  as you say easy since it is already cash.
Your keen approach to moving your wife's DB scheme to enable you to gamble with it is hopefully appreciated by your wife. In most cases transferring a DB pension is a bad idea.

Transferring may or may not be the right thing but I'm not jumping to the conclusion that he is forcing her to transfer to get his hands on her money.  Most couples will have one partner who is 'dominant' in financial matters and his use of "I" rather than "we" may just be reflecting that.        

LHW99

Dox said:

LHW99 said:

Don't forget to check what happens for each of you when the other finally passes on. Her DB may well give you a guaranteed 50% spouse pension, and there could be death in service benefits.

She's a deferred pensioner - so 'death in service' isn't going to apply.

True - missed that.

There may still be a guaranteed payment period, should she pass very soon after taking the pension.