I want to take CETV but firm is running down the time waiting for call back to move things along

RoadToRiches

Been advised by National Grid of a CETV value of 500k which I want to accept.  I believe I can make this work for me for 30 years, if I live that long, in retirement drawing down at 4% PA and would get a better return than taking £11K PA pension.

They advise I use certain provider to give me Independent Financial Advise.  I call them they give very reasonable figure to proceed, but then no one calls me.  I chase said company and they say that I am on the list to be called later in June.  My CETV runs out Mid July.

How long do they take to sign off everything and does this mean that the July CETV date is in jeopardy.  I am concerned the guaranteed amount will drop if they have to request a new one. 

Given what is happening in National Grid. I have concerns over solvency of Section B of their scheme, given they are selling off their Gas Distribution networks I don't want the Protection scheme at 90%. I am also single, no dependents and have no need of the extra spouse / child pensions when I die.  Rather have a lump sum that I choose who gets too should I die, rather than an annuity/payout from scheme that ends on dying..

I believe I would be better off with the CETV in that I can take out as and when needed and be in a position to take cash tax free lump sum to pay off my mortgage debts in full at anytime after I become 55.

I also have concerns over possible redundancies at some point in the future, which I hope will be after I turn 55.

dunstonh

They advise I use certain provider to give me Independent Financial Advise.

I suspect that is confusion on your part.   Providers do not give independent financial advice.   A small number of providers may operate a salesforce but they provide restricted financial advice.   Your scheme would normally just say you should seek independent financial advice and not make reference to any providers unless its a bulk transfer.

How long do they take to sign off everything and does this mean that the July CETV date is in jeopardy. 

3-12 months typically.   

RoadToRiches

dunstonh said:

I suspect that is confusion on your part.   Providers do not give independent financial advice.   A small number of providers may operate a salesforce but they provide restricted financial advice.   Your scheme would normally just say you should seek independent financial advice and not make reference to any providers unless its a bulk transfer.

The letter states I need to talk to a IFA but it also says...

"To help you the Trustees have appointed a firm of Independent financial advisers, XXXX, who can provide you with advice. Once you are within a year of your earliest retirement age (usually 54) the Trustees will pay for one free advice sessions from XXXX.  The trustees have also negotiated a preferential rate for members who have either used their free advice session or are not eligible for free advice and wish to use the services of XXX

XXXX will complete the Financial Advice Evidence Form if they recommend a transfer to another provider"

xylophone

"To help you the Trustees have appointed a firm of Independent financial advisers, XXXX, who can provide you with advice. Once you are within a year of your earliest retirement age (usually 54) the Trustees will pay for one free advice sessions from XXXX.  The trustees have also negotiated a preferential rate for members who have either used their free advice session or are not eligible for free advice and wish to use the services of XXX
XXXX will complete the Financial Advice Evidence Form if they recommend a transfer to another provider"

https://gas.nationalgridpensions.com/active/transfers

Crumbs!

Talk about holding the door open!

RoadToRiches

xylophone said:

Talk about holding the door open!

Exactly, my concern is that this delay in getting to talk to a IFA to get the paperwork done is going to jeopardise getting the CETV I have been offered and ending up with having to get a new value that will be less.

dunstonh

RoadToRiches said:

dunstonh said:

I suspect that is confusion on your part.   Providers do not give independent financial advice.   A small number of providers may operate a salesforce but they provide restricted financial advice.   Your scheme would normally just say you should seek independent financial advice and not make reference to any providers unless its a bulk transfer.

The letter states I need to talk to a IFA but it also says...

"To help you the Trustees have appointed a firm of Independent financial advisers, XXXX, who can provide you with advice. Once you are within a year of your earliest retirement age (usually 54) the Trustees will pay for one free advice sessions from XXXX.  The trustees have also negotiated a preferential rate for members who have either used their free advice session or are not eligible for free advice and wish to use the services of XXX

They will not be a provider in that case.  
The "one free advice session" is a bit of a con as virtually every firm, if not all, have the first meeting as free.
And preferential rates are often not that preferential as the figure before discount is often much higher than a more typical fee.

XXXX will complete the Financial Advice Evidence Form if they recommend a transfer to another provider"

That is probably out-of-date wording as advice firms cannot restrict to doing that anymore.  They are now required to sign the form whether the advice is negative or positive on transfer.

DairyQueen

RoadToRiches said:

dunstonh said:

I suspect that is confusion on your part.   Providers do not give independent financial advice.   A small number of providers may operate a salesforce but they provide restricted financial advice.   Your scheme would normally just say you should seek independent financial advice and not make reference to any providers unless its a bulk transfer.

The letter states I need to talk to a IFA but it also says...

"To help you the Trustees have appointed a firm of Independent financial advisers, XXXX, who can provide you with advice. Once you are within a year of your earliest retirement age (usually 54) the Trustees will pay for one free advice sessions from XXXX.  The trustees have also negotiated a preferential rate for members who have either used their free advice session or are not eligible for free advice and wish to use the services of XXX

XXXX will complete the Financial Advice Evidence Form if they recommend a transfer to another provider"

Your scheme is very keen to offload its DB liability thus it is offering the (rare) incentive of paying for /subsidising the (required) IFA advice. My scheme also offered this and I was initially wary of the recommendation to transfer I subsequently received. I did my own research and decided that the advice was sound. However, I am a rare exception that meets several key criteria:
- I have reduced life expectancy
- Married but childless and no dependants
- Spouse has his own generous pension arrangements which include good widow's benefits should I beat the odds and survive him
- I have experience of self-managing investments (non-expert)
- Multiple was decent (x 32).

OP: you have provided sketchy details of your circumstances (are you experienced/confident managing a large-ish portfolio? Do you have any other guaranteed pension or just the SP? What are your income requirements?) but superficially it seems that you may receive the thumbs-up. 

The three-month deadline on my offer was met despite the belated telephone interview with the IFA. That took place only 3 weeks prior to the deadline expiring but the report was produced, I accepted, and the funds transferred in time. This was a few years ago and we were not in the midst of a pandemic so not guaranteed that you will beat the deadline. You may have to pester.

Please do your own due diligence on the recommendation you receive. There are good reasons why most people should not transfer. Don't be dazzled by that headline figure. If this is your only pension (other than the SP) then you need a withdrawal strategy (SWR, managing adverse sequence of returns, etc.). You can't assume linear withdrawals, and/or a fixed withdrawal rate, will see you through. If you retire in your 50s then that pot may have to last you 40+ years and that's a decade longer than the standard 30-year drawdown period.

Marcon

RoadToRiches said:

 I chase said company and they say that I am on the list to be called later in June.  My CETV runs out Mid July.

How long do they take to sign off everything and does this mean that the July CETV date is in jeopardy.  I am concerned the guaranteed amount will drop if they have to request a new one. 

That would certainly be an incredibly speedy turnaround - but as a nominated adviser will already be very familiar with the scheme, that will help speed the process. The problem is that they aren't familiar with you and your circumstances - and that is the time consuming bit. 

If the advice is not to transfer, do you have a stakeholder pension scheme ready and waiting to accept the transfer now that the last major SIPP provider (AJ Bell) no longer accepts transfers from a DB scheme without a positive recommendation?

Why are you so worried that the CETV will drop? It might increase!

RoadToRiches

Marcon said:

If the advice is not to transfer, do you have a stakeholder pension scheme ready and waiting to accept the transfer now that the last major SIPP provider (AJ Bell) no longer accepts transfers from a DB scheme without a positive recommendation?

Why are you so worried that the CETV will drop? It might increase!

I fully expect given my circumstances that the advice will be in my favour to accept the CETV. I’ve already weighed up the pros and cons of the transfer. My choice of provider would be Interactive Investor to keep the fees as low as possible by replacing with a low monthly fixed charge. 

I’ve not yet opened the account as first want to hear from IFA on that first though.

Yes CETV could go up, though I doubt it if there’s a influx of people considering this option right now.

RoadToRiches

DairyQueen said::

- I have reduced life expectancy
- Married but childless and no dependants
- Spouse has his own generous pension arrangements which include good widow's benefits should I beat the odds and survive him
- I have experience of self-managing investments (non-expert)
- Multiple was decent (x 32).

OP: you have provided sketchy details of your circumstances (are you experienced/confident managing a large-ish portfolio? Do you have any other guaranteed pension or just the SP? What are your income requirements?) but superficially it seems that you may receive the thumbs-up. 

Circumstances are similar, single, only child, no dependents and no need of spouse or child pensions.
Health wise if I reach 80, then I will consider it a very good innings. As the house will be paid off, there’s the option of equity release later in life with lifetime mortgage however. I have no one to leave house to, unless my cousins want to fight it out between them after my mom and dad go.

I have some experience, though I am no expert, of trading and investing my own portfolio. I am prepared to accept the potential risk of loss that comes with investing in the markets.

I expect full state pension at 67

This is my main pension, which is now deferred after we were forced out of this DB scheme recently into a DC scheme which my employer currently double matches to 12% which I am taking full advantage of on my side while I can. I have transferred in the equivalent of a further years pay into this DC pot in an attempt to boost it a little from a very old SIPP.

I have another smaller DB scheme pension that is valued at around £1,500 a year.

my main debts are my mortgage and help to buy loan. I have one year of gross salary as emergency pot (cash), and a further year in other ISA investments. I am 4 years from my 55th birthday. Currently there are some redundancies happening where I am though have been told I am safe for now. Though I suspect in a year or two that may not be the case as the work I am doing will end up doing me out of a job.

if that happened savings/pension would have to tie me over, whilst I find alternative employment, either full/part time.

I expect tax free cash will pay off all my debts on the house. It will leave me a pot, including other investments, at 4% drawdown that I can comfortably live on that will get boosted by state pension in later life.

GunJack

Forgive me if this comes across as blunt, but it sounds like you're planning on transferring out and then dying with still a substantial amount of money/assets left over with no-one to leave it to....would the guaranteed income for life (however long) not be better??