Final Salary Transfer Out - Can anyone recommend a company?

bigjoe90

daveyjp said:

A higher yearly amount in year one, what about the amount in year 5, 10, 15 etc.

Will always be higher, even in year 20. 

wjr4

bigjoe90 said:

Its totally crazy these fees. My father is single, 65 in 2 months, so if he transfer to avaia, he can purchase a annuity for a higher yearly amount, than the scheme (as the scheme includes a spouses pension, which he does not need). Plus he can get a greater tax free cash amount.
Why should he have to pay 7k for something he can calculate on a scrap of paper?

You will not be comparing apples with apples. 

Albermarle

His pension is only worth about 4k a year in the scheme, the fees seem excessive to say the least.
He already has a transfer out quote and it is just over 100k in value. 

I think your Dad needs to take a step back . £100K to give up a guaranteed £4K pa is poor value , especially if the pension increases with inflation every year .
For example if a 60 year old man wanted to buy an annuity that paid an inflation linked pension for life of £4K , it would cost well over £150K 

Albermarle

bigjoe90 said:

daveyjp said:

A higher yearly amount in year one, what about the amount in year 5, 10, 15 etc.

Will always be higher, even in year 20. 

Are you correctly taking inflation into account .
The DB pension will most likely increase every year with inflation , which means that the spending power of the pension will not decrease over the years .
So you have to compare it with an annuity that also guarantees to do the same.
Annuities that do not increase with inflation will give a higher initial pension in the early years but each year the real value will get eaten away with inflation.

dunstonh

bigjoe90 said:

Its totally crazy these fees. My father is single, 65 in 2 months, so if he transfer to avaia, he can purchase a annuity for a higher yearly amount, than the scheme (as the scheme includes a spouses pension, which he does not need). Plus he can get a greater tax free cash amount.
Why should he have to pay 7k for something he can calculate on a scrap of paper?

I suspect there is a mistake in his figures somewhere.   It is extremely rare for annuities to get anywhere near the scheme pension with today's interest rates and reduced cross-subsidy pool.   There would have to be a significant medical condition (which would then question why you would use an annuity)

MEM62

bigjoe90 said:

Its totally crazy these fees. My father is single, 65 in 2 months, so if he transfer to avaia, he can purchase a annuity for a higher yearly amount, than the scheme (as the scheme includes a spouses pension, which he does not need). Plus he can get a greater tax free cash amount.
Why should he have to pay 7k for something he can calculate on a scrap of paper?

It's not crazy at all and the reasons for it have already been explained to you.  It far more than just a scrap of paperer and involves considerable risk and liabilities for the person giving the advice.  Either way, it is highly unlikely that any annuity would give him greater income that a DB scheme.       

xylophone

Has your father obtained a state pension forecast?

https://www.gov.uk/check-state-pension

OP is this pension a deferred pension?

Was your father a member of the scheme between 1978 and 1997?

ratechaser

If I were a betting man I'd say this will be the next big pension scandal, maybe in 10-20 years time, when all these wonderfully large transfer amounts are exhausted. Possibly sooner, after whenever the next major market downturn happens. I'll be spitting feathers if it leads to restrictions on drawdown before I'm able to start accessing my own pots.

Can't say I'd want to be in the vicinity of AJ Bell when that happens either 

daveyjp

bigjoe90 said:

daveyjp said:

A higher yearly amount in year one, what about the amount in year 5, 10, 15 etc.

Will always be higher, even in year 20. 

What will the DB £4,000 a year be worth in 20 years time compared to the annuity?

Albermarle

Can't say I'd want to be in the vicinity of AJ Bell when that happens either  

I have thought that as well . There is a reason why all their main competitors will not accept these insistent client transfers . They do not want to be involved if the smelly stuff hits the fan I presume .