Does a CETV value naturally increase..

Lucys_Da

Marcon said:

Lucys_Da said:

IAMIAM said:

I have a CETV of 90k with a guaranteed pension of £5k per annum at age 60. I am tempted to transfer out and SIPP it but want to leave it also, if the 90k becomes 120k etc in 10 years etc. I have 20-25 years left to take it. 

To be honest, even though I felt I had very sound personal and financial rationales for transferring my pension I was really struggling to get someone to take it on. 

Wrong strategy. If an adviser thinks you've already made your mind up (and saying you have 'very sound...rationales' will sound that way to their wary ears) you are almost automatically seen as an even greater risk. Best bet is simply to say you'd like them to investigate/advise on the possibility of a transfer. You can then explain your reasons once the process is underway.

Hadn’t thought about it like that - I had assumed doing some research and investigation would demonstrate some sound thoughts on it, rather than just liking the sound of a big number. Thanks for the heads up if I do go to investigate it again. 

This whole area is almost as divisive as Covid lol...some people reckon it makes perfect sense in an example like mine to transfer and yet others are all for holding onto the defined scheme to the end. To me given even modest growth of 4% over 15 years that pot would be worth in excess of £700k which I reckon would get me a lot more than the defined benefit. I don’t know if it’s just people like the surety of that defined amount and I appreciate that there are risks and the £350k could be worth nothing in 20 years, but that not how the markets have historically worked and it would need to be a fairly cataclysmic to create that...does that bring me full circle to covid again lol!!  

NottinghamKnight

Lucys_Da said:

Marcon said:

Lucys_Da said:

IAMIAM said:

I have a CETV of 90k with a guaranteed pension of £5k per annum at age 60. I am tempted to transfer out and SIPP it but want to leave it also, if the 90k becomes 120k etc in 10 years etc. I have 20-25 years left to take it. 

To be honest, even though I felt I had very sound personal and financial rationales for transferring my pension I was really struggling to get someone to take it on. 

Wrong strategy. If an adviser thinks you've already made your mind up (and saying you have 'very sound...rationales' will sound that way to their wary ears) you are almost automatically seen as an even greater risk. Best bet is simply to say you'd like them to investigate/advise on the possibility of a transfer. You can then explain your reasons once the process is underway.

Hadn’t thought about it like that - I had assumed doing some research and investigation would demonstrate some sound thoughts on it, rather than just liking the sound of a big number. Thanks for the heads up if I do go to investigate it again. 

This whole area is almost as divisive as Covid lol...some people reckon it makes perfect sense in an example like mine to transfer and yet others are all for holding onto the defined scheme to the end. To me given even modest growth of 4% over 15 years that pot would be worth in excess of £700k which I reckon would get me a lot more than the defined benefit. I don’t know if it’s just people like the surety of that defined amount and I appreciate that there are risks and the £350k could be worth nothing in 20 years, but that not how the markets have historically worked and it would need to be a fairly cataclysmic to create that...does that bring me full circle to covid again lol!!  

Your opinion is irrelevant and may be damaging. The adviser is paid to take an objective assessment to determine whether a transfer is in your interest, in most cases it won't be. You then need his report, even advising against transfer, to allow the money to be moved as there are a small number of options for transferring where advice is against. There are many factors including ensuring numbers compared are like for like in inflation terms, and if interest rates increase int he future then transfer terms will almost certainly get less attractive.

Albermarle

I have a further £330k in a DC pension and would prefer the flexibility and ability to manage the money myself

Another opinion widely held , is that having a DB and a DC pension of approx equal values, combines the best of both worlds .

 

german_keeper

Albermarle said:

I have a further £330k in a DC pension and would prefer the flexibility and ability to manage the money myself

Another opinion widely held , is that having a DB and a DC pension of approx equal values, combines the best of both worlds .

 

That's definitely the way I see it. We both have DB pensions and currently both paying into DC. DB are both index linked with no cap so DC will likely be fully drawn down by 67 and then replaced by full state pension.
In my eyes this is a very safe and very simple plan and our income in retirement will be similar to when working but without £600+ per month mortgage to pay, 3 kids to bring up, feed and clothe. Happy Days.
I am partially retired so my DB is in payment; civil service so couldn't be transferred anyway. Mrs GK has a private sector DB, NRA 60 in just over 5 years time, so I assume it may be possible to transfer. But I'm not interested, haven't even checked.
The way I see it is even if it apparently was a good deal and assuming a certain level of return why would I jeopardise a nice comfortable retirement. I'm probably not as convinced of the power of the stock market as most but I see it as a bit like chucking a large wedge of my retirement money on a horse at 1/16 because let's face it, it can't lose and when it wins I will have more money in my retirement pot. I choose those odds carefully as a horse did lose at 1/16 a couple of months ago. Maybe others will think that's not a relevant comparison.

Albermarle

Often it seems people are interested to transfer out of a DB pension becasue they are concerned that if they die early then the pension is 'lost' . If you have substantial DB and DC pensions ,then the DC pension can be left alone or withdrawn from at a sensible low level throughout retirement .
Then it can be a legacy for the family and one that does not currently contribute to IHT calculations . 

Of course you can argue that if you transfer the DB into then a larger DC , you could leave an even bigger legacy . However that is only if everything works out OK and you are not forced to withdraw at too high a rate to sustain the income you need.