Transferring a DB (Final Salary) Pension – Cheapest Option of obtaining ‘advice’

Sepoy

Hi there, I want to transfer a deferred Defined Benefit (Final Salary) pension into an existing SIPP that I  manage myself. The pension CETV is over £30k so I know that I have to seek financial advice before trying to arrange it.

 

My own circumstances are such that I currently have no need for additional pension income as I am divorced, live with my partner, have a good secure job that I enjoy, rent out my own properties, have other pensions and 2 children in late 20’s/early 30’s.

 

By transferring the total pension value to a SIPP I can take lump sums as/when the need arises and still have a sizeable inheritance to pass down to my children when the inevitable happens.

 

To be charged an eye watering 3 or even 4% fee for advice that I simply won’t need, nor take any notice of, seems like a complete waste of money, so is there any cheaper way of getting ‘advice’ in transferring a DB pension?

 

Many thanks for your interest in reading this and hopefully I’ll get some useful info back.  

dunstonh

To be charged an eye watering 3 or even 4% fee for advice that I simply won’t need, nor take any notice of, seems like a complete waste of money, so is there any cheaper way of getting ‘advice’ in transferring a DB pension?

If you understood the risks and costs to the advising firm, you wouldn't find it eye watering.   Indeed, you may end up wondering why any advice firm actually does it.

3-4% could be cheap.  It could be expensive.  Without knowing the amount that the percentage is applied to, there is no context.

3-4% on £50k is cheap.  On £100k about right.  On £500k it is expensive.

And no, there is no way to avoid it.

NottinghamKnight

The obvious point is 3 or 4% of what.
It's a free market so people can offer the service, or not, and charge what they think is reasonable or more accurately what the market will bear. 
The point that always seems lost is that what people signed up to contractually is to be paid a pension based on their salary when they reach retirement age. The ability to transfer this out as  a lump sum was never available when they signed up, this is a recent option whch they can explore or stick with what they were promised originally.

Albermarle

https://forums.moneysavingexpert.com/discussion/6144878/can-i-cash-in-sell-out-my-final-salary-pension-early/p1
https://forums.moneysavingexpert.com/discussion/6198135/can-t-find-an-ifa-to-advise-on-db-transfer-because-on-increased-pii-and-sub-100k-pot#latest
https://forums.moneysavingexpert.com/discussion/6203329/change-of-pension-provide#latest
Same topic is discussed on a regular basis on the forum . Try using the search facility . Above is a couple of recent ones

Marcon

Seems to be another outing for a similar queries several years ago: https://forums.moneysavingexpert.com/discussion/5551720/transferring-a-final-salary-pension#latest

[Deleted User]

£3000. Which is a lot of money.
Maybe worth contacting those on the thread below to see how they were treated by Pensionhelp:
https://forums.moneysavingexpert.com/discussion/6189721/anyone-dealt-with-this-company/p1

dunstonh

Marcon said:

Seems to be another outing for a similar queries several years ago: https://forums.moneysavingexpert.com/discussion/5551720/transferring-a-final-salary-pension#latest

Sometimes makes you question why we bother when people just ignore what is said. 

Albermarle

dunstonh said:

Marcon said:

Seems to be another outing for a similar queries several years ago: https://forums.moneysavingexpert.com/discussion/5551720/transferring-a-final-salary-pension#latest

Sometimes makes you question why we bother when people just ignore what is said. 

You can take a horse to water, but you can't make it drink .

sandsy

Cheapest advice might not be the best advice. If you were seeking legal advice from a solicitor, would you seek the cheapest advice so you could ignore it? A regulated advice firm is required to provide financial advice advice that is in your best interest - and carries liability for that advice forever - so why would you want to ignore that advice? I suspect you would be surprised at just how involved the pension transfer advice process is.

ukdw

Once transferred it is quite possible that the invested pot could regularly go up or down by more than a one off 1% or  3-4% IFA charge a few times a year.
 Whilst keeping initial charges down is of course desirable, I think keeping ongoing charges down is probably more important than one off charges in the long run.

Albermarle

ukdw said:

Once transferred it is quite possible that the invested pot could regularly go up or down by more than a one off 1% or  3-4% IFA charge a few times a year.
 Whilst keeping initial charges down is of course desirable, I think keeping ongoing charges down is probably more important than one off charges in the long run.

Not just ongoing charges, but investment returns as well 
There are many posters railing against the high IFA fees for a DB transfer but at the same time just assuming the pot will increase by >5% every year .