Pension has finally landed - As an insistent client acting against advice -*DOORS CLOSED 03/09/2021*

eskbanker

DeadlyD said:

I can use my SIPP 25% but on its own its not viable to take early retirement or care for my parents. Is there anywhere that advises what exactly is justification to transfer? I want to actually retire with investments managed so I can have an annual income but the annual from the DB is very, very small that's why I want it invested.

DeadlyD said:
You are right there is nothing stopping me withdrawing from the DB as it is but it wouldn't feed the dog for a month.

Putting all the endless debate about points of principle to one side, surely 30x (or whatever) a "very, very small" number is still pretty small, rather than life-changing?  What sort of numbers are you talking about for your SIPPs and DB annual/CETV?

xylophone

Who knows what a Regional IFA 

First read

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

You need a Pension Transfer Specialist.

See link in my post above.

xylophone

I have read through that thread a bit and it appears that there is still a catch that SL would need an IFA to approve the insistent client into a stakeholder pension, but then others say that its against the legal requirements and they must accept a DB transfer into a stakeholder. Which is correct? 

As nobody with an existing SL stakeholder has come back to say that they were able to transfer in (as an "insistent client") or challenged a refusal by SL, we just don't know.

dunstonh

Right so that's helpful, I need to find an IFA (I had no idea about SJP and what that means!) crikey. I guess I need to Google large regional IFA's I have tried Fidelity but not sure who Large IFA's are ..? Your assistance here on understanding is great thanks! 

Fidelity is not an IFA.    Most IFA firms have 1-5 advisers and have an internet footprint that is similar to your local butcher.  What you are looking for is one that has offices in the nearest city or large towns (perhaps 2-3 offices in the county).   Anecdotally, that appears to be the sweet spot where they are big enough to do DB transfers but not too big that they have restricting systems and controls.
 
Googling local IFAs should give you a number of responses.  Then look for the offices it has and where and you should get an idea of their size from that.    If an IFA thinks early on that you have no hope, then you would pretty much expect them to tell you before you incur any charges.

I can use my SIPP 25% but on its own its not viable to take early retirement or care for my parents. Is there anywhere that advises what exactly is justification to transfer? 

There is no hard and fast guide. It is more about your scenario and circumstances overall.  Affordability/capacity to absorb losses are very important.    Inflation is likely to be running higher than it has been.  Investment returns are probably going to be lower than they have been (net of inflation).   If your goals can be achieved with a transfer using pessimistic assumptions but not achieved if left in the DB scheme (or alternative options) then it works in your favour to transfer.   

Where you tend to find the refusal to advise to transfer is where the goals are not affordable either way or the justification just doesn't stack up.  A lot of people attempting to transfer underestimate the value of an annually increasing secure pension income for life.  They look at returns over the last decade and think that is the norm.  If they don't need to draw much money then that is not a problem but if they are pushing limits with little in reserve then it's not likely to be on.

Marcon

DeadlyD said:

dunstonh said:

All advisers have to have PI insurance. There is no choice. Advisers cannot transact in areas that they do not hold regulatory permissions or PI insurance on.   SJP is a tied salesforce and not an IFA.   They can restrict their services.  larger company FAs will restrict what will and wont do as they have to cater for hundreds or thousands of FAs that will have variable knowledge and ability.  So, you often find their systems and controls are set to cater for the lowest common denominator.

I am not saying your justification is strong.   Paying off the mortgage from the pension is rarely a good idea.  Inheritance can be just as long as you remain in a strong financial position.    Maybe you should speak with a large regional IFA firm.  Not a small local office but one that perhaps has a few branches in the local towns/city.  i.e. one that is not too small that it doesn't want to do DB transfers and one that is not too big and restricts more.

. I do have SIPPs too, am I missing something? 

So, could you use the SIPPs to achieve what you want and keep the DB scheme running?

Right so that's helpful, I need to find an IFA (I had no idea about SJP and what that means!) crikey. I guess I need to Google large regional IFA's I have tried Fidelity but not sure who Large IFA's are ..? Your assistance here on understanding is great thanks! 

I can use my SIPP 25% but on its own its not viable to take early retirement or care for my parents. Is there anywhere that advises what exactly is justification to transfer? I want to actually retire with investments managed so I can have an annual income but the annual from the DB is very, very small that's why I want it invested. Before anyone comments I do know the pitfalls but its just not worth enough and my circumstances are my husband retires 12 years later, so we will have other income. 

If your DB pension is 'very, very small', then do you actually have an idea what your transfer value is? You say you want to invest it so you can have an annual income, but if the transfer value is modest, and markets fall, you aren't going to get an income just because the funds are 'invested'. 

Daniel54

You say that the DB wouldn't feed the dog for a month

For the avoidance of doubt ,have you obtained an up to date statement of the annual income and the tax free lump sum options available from the DB ?

We have had people on here who have not realised that their DB is not frozen, but increases by inflation from the date of deferral.

Your other stream of fixed inflation proofed income is the state pension.Hopefully you have obtained a state pension forecast and factored this into your plans

As has been said previously, even with a high CETV it is difficult to see how such a small  DB can generate a life changing transfer value.

If your plan is to transfer out and then drain the pot over a fairly short time period,  then you are going to struggle to find a positive recommendation.

DeadlyD

dunstonh said:

Googling local IFAs should give you a number of responses.  Then look for the offices it has and where and you should get an idea of their size from that.    If an IFA thinks early on that you have no hope, then you would pretty much expect them to tell you before you incur any charges.

Thank you. I'm trying Pensionhelp and opened a Stakeholder pension.

There is no hard and fast guide. It is more about your scenario and circumstances overall.  Affordability/capacity to absorb losses are very important.    Inflation is likely to be running higher than it has been.  Investment returns are probably going to be lower than they have been (net of inflation).   If your goals can be achieved with a transfer using pessimistic assumptions but not achieved if left in the DB scheme (or alternative options) then it works in your favour to transfer.   

Understand. My DB over my considered lifetime will provide me with less than the CETV and I'm just not reliant on it. But if I could have the 25% then I can change my life to help with caring and pay off my mortgage - but the latter sounds like I shouldn't even mention this as part of the need to transfer but the consequences of inheritance. 

xylophone

the consequences of inheritance. 

Do you mean that you would be seeking to use the desire to pass on your pension as an inheritance as a reason to transfer out?

See

https://www.fca.org.uk/consumers/pension-transfer-defined-benefit

You may be less suited to a transfer if there are alternative options available to achieve the goals you want to achieve. For example, if you want your family to inherit your pot on your death, you need to remember that by the time you die, you may have spent a lot of the money. Most people near retirement today will live well into their 80s, with many surviving into their 90s. If you want to protect your family financially, you could consider buying life insurance instead.

DeadlyD

xylophone said:

the consequences of inheritance. 

Do you mean that you would be seeking to use the desire to pass on your pension as an inheritance as a reason to transfer out?

You may be less suited to a transfer if there are alternative options available to achieve the goals you want to achieve. For example, if you want your family to inherit your pot on your death, you need to remember that by the time you die, you may have spent a lot of the money. Most people near retirement today will live well into their 80s, with many surviving into their 90s. If you want to protect your family financially, you could consider buying life insurance instead.

It's contradictory though, I am not reliant on the DB pension I have other pensions and my husband does too. So apart from being terminally ill and very wealthy what are the actual reasons that are acceptable to transfer. 
If its not for inheritance, its not for the "lump Sum 25%", not for retiring early, not for paying the mortgage off what is actually acceptable apart from being terminally ill? 

Linton

DeadlyD said:

dunstonh said:

Googling local IFAs should give you a number of responses.  Then look for the offices it has and where and you should get an idea of their size from that.    If an IFA thinks early on that you have no hope, then you would pretty much expect them to tell you before you incur any charges.

Thank you. I'm trying Pensionhelp and opened a Stakeholder pension.

There is no hard and fast guide. It is more about your scenario and circumstances overall.  Affordability/capacity to absorb losses are very important.    Inflation is likely to be running higher than it has been.  Investment returns are probably going to be lower than they have been (net of inflation).   If your goals can be achieved with a transfer using pessimistic assumptions but not achieved if left in the DB scheme (or alternative options) then it works in your favour to transfer.   

Understand. My DB over my considered lifetime will provide me with less than the CETV and I'm just not reliant on it. But if I could have the 25% then I can change my life to help with caring and pay off my mortgage - but the latter sounds like I shouldn't even mention this as part of the need to transfer but the consequences of inheritance. 

Can you give us some numbers?  Have you taken into account the effect of inflation?  Depending on your interest rate paying off the mortgage may be an inefficient use of your money.  Perhaps you can achieve your objectives by increasing your mortgage and paying it off with the increasing DB income?

Though of course your case may be sufficiently strong to justify a transfer.