Transfer Defined Benefit pension to SIPP, iSIPP or QROPs.

Jxos08

I’m after a little bit of advice or any thoughts any of you have on moving my pension out of my DB scheme.   I have really struggled to get any advice, Independent Financial Advisors have generally been wanting up to £9k to tell me not to move it (default position), refuse to give me advice unless I do what they recommend (insistent client) or try and get me to move it to one of their recommended schemes (QROP or SIPP)  that charge £9k per anum.  None of the advice has been objective or independent! 

For this reason, I am looking to do it myself and transfer to either a SIPP (A J Bell or Interactive Investor) or an iSIPP (James Hay).  The reason behind the iSIPP is in case of changes in legislation after Brexit.

I am tax resident in Spain, I intend to invest in low risk bonds to generate a small return and draw out as much as cash is possible (tax efficient) annually to invest in residential property (over a ten year period maybe), I am currently 53.  Transfer value £380,000.

Prism

Your option then is to pay for the advice and then move it to a SIPP that will accept an insistent client. AJ Bell have previously been known to accept that kind of transfer.

The advice to stay in the DB scheme is likely correct when compared to investing it in bonds (I would not call them especially low risk at the moment) and then property, but if you disagree with them then pay the smallest fee you can find and do it yourself.

Malthusian

You want to cash in an investment that is low risk, high return, invest the proceeds in something low risk, low return, and periodically withdraw money to invest in something high risk, high return. Your plan makes no sense.

But that doesn't actually matter because the important bit is what Prism said. There is no way a professional adviser will sign off on this so you need to find one who is willing to give advice, pay them to say they don't recommend it, and then use it that to transfer to a provider that accepts insistent clients.

If the returns you expect from this plan are worthwhile - worthwhile enough to make the extremely high risk worth it - the cost of the advice would be trivial.

Jxos08

Prism said:

Your option then is to pay for the advice and then move it to a SIPP that will accept an insistent client. AJ Bell have previously been known to accept that kind of transfer.

The advice to stay in the DB scheme is likely correct when compared to investing it in bonds (I would not call them especially low risk at the moment) and then property, but if you disagree with them then pay the smallest fee you can find and do it yourself.

Sorry, the point is not the cost, it is actually getting some advice that isn't being given because the FSA have already said what that advice must be and that the IFA is afraid of future litigation.  The long term aim is to invest in property.

Jxos08

Malthusian said:

You want to cash in an investment that is low risk, high return, invest the proceeds in something low risk, low return, and periodically withdraw money to invest in something high risk, high return. Your plan makes no sense.

But that doesn't actually matter because the important bit is what Prism said. There is no way a professional adviser will sign off on this so you need to find one who is willing to give advice, pay them to say they don't recommend it, and then use it that to transfer to a provider that accepts insistent clients.

If the returns you expect from this plan are worthwhile - worthwhile enough to make the extremely high risk worth it - the cost of the advice would be trivial.

The current pension is only worth £7,500 a year, I can make much more money than that by investing the money in property.   The point is not the cost of advice, the point is that no-one will give me any financial advice because of the FSA's default "don't move it", the IFA's fear of future litigation or hope to sell you something for great profit to themselves!

Prism

Jxos08 said:

Prism said:

Your option then is to pay for the advice and then move it to a SIPP that will accept an insistent client. AJ Bell have previously been known to accept that kind of transfer.

The advice to stay in the DB scheme is likely correct when compared to investing it in bonds (I would not call them especially low risk at the moment) and then property, but if you disagree with them then pay the smallest fee you can find and do it yourself.

Sorry, the point is not the cost, it is actually getting some advice that isn't being given because the FSA have already said what that advice must be and that the IFA is afraid of future litigation.  The long term aim is to invest in property.

Ok, it is possible to find a pension transfer specialist who will likely give you the advice not to move your pension. You will need to pay for that. Then you can ignore that advice and transfer to a SIPP that will accept you. Then you are in a position to extract the money however you like.

Someone will probably come along soon and give the name of a company that could help.

Albermarle

The multiple of 50 ( CETV divided by annual pension ) is VERY high , so I think a lot of people would be tempted at that level , as typically it is more in the 30 to 35X range.
Are you sure of your figures? Is the £7500 an up to date figure , or is it the figure you were given when you left the employer some years ago maybe ?

Jxos08

Albermarle said:

The multiple of 50 ( CETV divided by annual pension ) is VERY high , so I think a lot of people would be tempted at that level , as typically it is more in the 30 to 35X range.
Are you sure of your figures? Is the £7500 an up to date figure , or is it the figure you were given when you left the employer some years ago maybe ?

It's actually more than that - this is a recent quote valid until December.  Pension £7,354 a year (£613 a month) and transfer value is £384,000.

garmeg

Jxos08 said:

Albermarle said:

The multiple of 50 ( CETV divided by annual pension ) is VERY high , so I think a lot of people would be tempted at that level , as typically it is more in the 30 to 35X range.
Are you sure of your figures? Is the £7500 an up to date figure , or is it the figure you were given when you left the employer some years ago maybe ?

It's actually more than that - this is a recent quote valid until December.  Pension £7,354 a year (£613 a month) and transfer value is £384,000.

Is that the pension you would get if you could retire now (at 53) or a projected value at normal retirement age or the pension when you left the scheme or something else?

Jxos08

I've been doing some more research and it would seem that a SIPP and  International iSIPP are actually exactly the same apart from the name to attract overseas customers or am I missing something?

xylophone

This is a deferred defined benefit pension?  
Do you have the statement of deferred benefits on leaving?

The Trustees of the  DB scheme will not permit a transfer out without confirmation that you have received  the appropriate advice.

Below are worth reading.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/pension-transfers-conversions/

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/transfer-pension-scheme/