Final Salary Pension Transfer

arty688

I'm not saying my spouse wouldn't be involved , I was just surprised that input of another adults finances was even considered.. They do have a benefit from a DB pension but that would still be the owner of the DB to make the call if that was important to them.
I know the system is set up wit the illusion that people are adults and responsible but in fact assumes people are neither. 

I have given up on the idea of a transfer, and will take 25% out when I'm 60 and have a reduced pension which will just go to the council if I make it into the nursing home..

I'm the only person I know that doesn't have separate bank accounts we have just 1 joint account so it wouldn't be a personal issue .

Malthusian

Pablo7474 said:

Re GMP, I had a friend who received about £2k per year at 60, then when got to 65 his GMP came into payment which was about another £5k. He therefore realised the transfer value he had been offered was not as good as he thought as he was basing it on £2k per annum. 

The difference between looking at a pension as the owner and looking at it as an adviser in a nutshell. A pension member overlooks the existence of the GMP while weighing up cashing in his pension, doesn't matter, he still gets it when he turns 65 even though if the scheme had kept it in their pocket he'd be none the wiser. An adviser overlooks the existence of the GMP, bye-bye business. (The redress payable for getting a single DB transfer wrong would sink most small IFA companies, and PI cover can't be guaranteed as it's on a claims-made basis.)

Because it is so rare for ignorance about financial matters to be punished (those who get missold get redressed, those who send their money to fraudsters get bailed out by their bank, those who pay no attention whatsoever to their retirement planning for decades are sent a letter at 67 telling them how to claim their 50% of salary pension) it's very easy to conclude that financial advice is dead easy because you don't know what you don't know. The positive side is that it's very rare for ignorance about financial matters to be punished.

RoadToRiches said:

I told my IFA everything, including I was single no dependents yet they still did a comparison report as though I had a partner who would inherit a 2/3 pension on my demise. This obviously made his case stronger, a fact I discounted on reading the final report to come to my own conclusion/decision. This was not the only reason by the way.

People who are single with no dependents when they cash in their DB scheme are not always single with no dependents when they die.

There was an Ombudsman case recently where someone successfully argued that he should not have been advised to transfer as, based on his modelling shots, the assumption made by the adviser that he would remain single forever and the widow's pension was therefore of no value was clearly unrealistic. Especially once you factored in the babe magnet that he bought with his cashed-in pension. (I may have made that up.)

arty688

People who are single with no dependents when they cash in their DB scheme are not always single with no dependents when they die.

There was an Ombudsman case recently where someone successfully argued that he should not have been advised to transfer as, based on his modelling shots, the assumption made by the adviser that he would remain single forever and the widow's pension was therefore of no value was clearly unrealistic. Especially once you factored in the babe magnet that he bought with his cashed-in pension. (I may have made that up.)

Report

Surely then you could also argue just because you are married now you may not be when you die, so any advise that is based on the spouses finances could also  be considered dubious, which is my point as to taking another persons finances into account.

RoadToRiches

Malthusian said:

RoadToRiches said:

I told my IFA everything, including I was single no dependents yet they still did a comparison report as though I had a partner who would inherit a 2/3 pension on my demise. This obviously made his case stronger, a fact I discounted on reading the final report to come to my own conclusion/decision. This was not the only reason by the way.

People who are single with no dependents when they cash in their DB scheme are not always single with no dependents when they die.

There was an Ombudsman case recently where someone successfully argued that he should not have been advised to transfer as, based on his modelling shots, the assumption made by the adviser that he would remain single forever and the widow's pension was therefore of no value was clearly unrealistic. Especially once you factored in the babe magnet that he bought with his cashed-in pension. (I may have made that up.)

I think the chances of me finding a young 18 year old to marry and thus put an extra burden on the scheme are slim to none, but get your point. 

Pablo7474

arty688 said:

I'm not saying my spouse wouldn't be involved , I was just surprised that input of another adults finances was even considered.. 

Often only one person in a partnership looks after the financial side, so if partner 1 dies, maybe partner 2 is very unhappy managing own investments and taking income through drawdown, so maybe DB spouse pension is best for them?

Maybe partner 2 has a DB in place that already meets their needs.

Maybe partner 2 has £20m in the bank and doesn’t need a pension.

Maybe partner 2 has a life limiting illness and will be dead in 5 years and doesn’t need spouses pension.

So of course it is important to take the partners circumstances and assets into account. 

Aretnap

arty688 said:

Surely then you could also argue just because you are married now you may not be when you die, so any advise that is based on the spouses finances could also  be considered dubious, which is my point as to taking another persons finances into account.

You might well not stay married for the rest of your life, but that doesn't make your spouse's assets irrelevant. If you got divorced you would be entitled to a share of your spouse's assets and/or pension (assuming your spouse is richer than you). And if your spouse dies before you then the expectation would be that you would inherit most or all of their assets, and if they have a DB pension it's likely to have some provision for a surviving spouse.

You can probably imagine scenarios where your marriage ends and you get nothing (perhaps your wife has secretly left all her money to the local dog's home rather than to you), however they would not be common scenarios. So it seems reasonable to factor a spouse's assets and pension into the advice, perhaps with a few caveats. 

arty688

so if the decision is purely based on the circumstances at the time of the assessment then single would mean single?

So is the assumption of the IFA that the transferred money disappears ? As all those considerations will be there if you just had a DC pension.

The whole system seems to be busied on people with life long DB pensions with mine your talking £2.5k per year and my spouse is much more likely to end up with a decent amount of cash than a £1.2k pension is worth.

Again it working on the premise that people can't make those decisions for themselves, I do have sympathy for that point of view as whenever I have had dealings with the great British public I wouldn't trust most of them to make the right decision . Doesn't mean they shouldn't be free to make the wrong decision though.

Pablo7474

But many would make a decision without understanding the full facts. Back to the GMP example. 

arty688

I'm not against advise , I do find the charge excessive though and the fact that is has been deliberately designed to be excessive does make me cross.

What does annoy me though is you can't ignore the advise if you so wish.

On the GMP thing how do find out if I get that? Do I just ask the pension provider (Willis Tower Watson) ? As although I have given up on the transfer thing that seems to be something worth investigating ?

RoadToRiches

The GMP Element if it is available should be on your CETV