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

Linton

Dale72 said:

I think it was you who was going with a future is 100% known argument rather than me going with a totally unknown one. The uncertainty of the future should mean it shouldn't play such a significant role, far less than the clients circumstances and wishes. 

You may find it useful to read through and understand https://www.fca.org.uk/publication/guidance-consultation/gc20-01.pdf which should give you a good idea of what the FCA expects when a DB transfer is assessed.

HappyHarry

Linton said:

Dale72 said:

I think it was you who was going with a future is 100% known argument rather than me going with a totally unknown one. The uncertainty of the future should mean it shouldn't play such a significant role, far less than the clients circumstances and wishes. 

You may find it useful to read through and understand https://www.fca.org.uk/publication/guidance-consultation/gc20-01.pdf which should give you a good idea of what the FCA expects when a DB transfer is assessed.

Latest guidance here: https://www.fca.org.uk/publication/finalised-guidance/fg21-3.pdf

Dale72

If I have any FCA related questions I speak to my contact there, but thanks anyway . I think we all know the current rules are not satisfactory, it's just some are clinging onto them for the fear of losing too much business, or even the fear of giving the drones too much control for themselves.

xylophone

You have no GMP because your service was post 1997 (when the GMP system came to an end).

However, it was replaced by the "Reference Scheme Test"

- see https://pensiontransferspecialist.co.uk/section-92b-rights/ and

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

You mentioned that you have teenagers - looking at the Scheme Guide, I noted the information concerning provision for dependent children - this is a benefit of remaining in the scheme which your adviser might set on the "disadvantages of transfer out" side.

You have reached the age where taking the pension on an actuarially reduced basis could be a possibility - you would need to check the reduction.

If you took the pension, there would be the possibility of commuting part of it to a lump sum but you would have to check the factor that applied in your particular circumstances.

Had you considered exploring taking the pension early and  finding a job with part time hours/working from home options? This could give you just the extra time you need to care for your parents  and remove the work related stress from which you suffer?

And taking a  DB scheme pension would not trigger the MPAA in respect of any future contributions to a DC pension.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/money-purchase-annual-allowance-mpaa/#:~:text=The MPAA (money purchase annual,a tax charge is payable.

With regard to your state pension forecast, does it say  that you have already reached the maximum and cannot improve your pension any more or that you need to continue to contribute to reach the maximum?

https://www.which.co.uk/money/pensions-and-retirement/state-pension/your-state-pension-forecast-explained-a24r12y9jt41

Daniel54

Reading through the ICL pension page, the commutation rate for a pension with NRD 65 is 9:1 ,which is truly dire.

It does say the commutation factor may change with age so worth checking anyway

xylophone

 the commutation rate for a pension with NRD 65 is 9:1 ,which is truly dire.

Yes, but OP"s NRA is 60 and there is no example in the booklet of somebody in her particular situation -  (details about early retirement or commutation factors).

It is clear that an individual calculation would need to be done under the rules set by the actuaries.

DeadlyD

xylophone said:

You have no GMP because your service was post 1997 (when the GMP system came to an end).

However, it was replaced by the "Reference Scheme Test"

- see /

You mentioned that you have teenagers - looking at the Scheme Guide, I noted the information concerning provision for dependent children - this is a benefit of remaining in the scheme which your adviser might set on the "disadvantages of transfer out" side.

You have reached the age where taking the pension on an actuarially reduced basis could be a possibility - you would need to check the reduction.

If you took the pension, there would be the possibility of commuting part of it to a lump sum but you would have to check the factor that applied in your particular circumstances.

Had you considered exploring taking the pension early and  finding a job with part time hours/working from home options? This could give you just the extra time you need to care for your parents  and remove the work related stress from which you suffer?

And taking a  DB scheme pension would not trigger the MPAA in respect of any future contributions to 

With regard to your state pension forecast, does it say  that you have already reached the maximum and cannot improve your pension any more or that you need to continue to contribute to reach the maximum?

Thanks so much! What a lot of valuable info. 

On the reduced pension, I do have the figures but it’s really not going to make any difference (£14k and £2k pa) I can’t afford to change anything. I have considered a part time job but my profession doesn’t allow that (lots of circumstances) so it’s a bit all or nothing. 

I have 1 teen under 18 & a 19yr old classed as an adult. 

I have the maximum state pension applicable. 

Reading through the FCA FG21/3 there’s so much to consider for an IFA documenting and providing the suitability report and it’s fascinating that examples of good practice are all based on reasons not to recommend a transfer. I’m amazed how anyone I know has managed to actually successfully transfer and invest their fund appropriately which is giving them freedom to retire on a healthy drawdown. 

It’s 92 pages long so only skimmed read but will look at the links. 

Again thank you this invaluable knowledge. 

xylophone

You say that the nature of your job does not permit part time employment and gives you little time with your elderly parents (not to mention your husband and  offspring).

Would you be able to find part time employment in another field where the work does not involve frequent travel and high stress?

You could then perhaps transfer your existing workplace scheme to your SIPP and take just the PCLS which would be enough to redeem the mortgage?

This would not trigger the MPAA in respect of  contributions to a pension scheme provided by the new employer.

Your income would then be boosted by the DB pension when you reach 60 and by the SP when you reach SPA.

Marcon

DeadlyD said:

Diplodicus said:

In the main, without a recommendation to transfer, clients currently are unable to transfer.

Do you agree with that, xylophone? 

That appears to be the case and back to my original point unless I can obtain the recommendation and an IFA won’t give me a guarantee of that prior to spending £6k. It’s just wrong. 

Question do I absolutely need an IFA to agree for the transfer as an insistent client into the Stakeholder? 

I don't think it is the case. I've started a new thread so information doesn't get buried in the bickering from some parties on this very long thread! 

See my post of a few minutes ago: 
https://forums.moneysavingexpert.com/discussion/6301726/confirmed-stakeholder-pension-which-accepts-insistent-clients-and-offers-drawdown/p1?new=1

JoeCrystal

I came across an interesting report about the current state of the DB transfer market: Have fun! Link to the report inside this website: I imagine in a decade, there will be barely a handful of IFAs willing to advise left

https://www.lcp.uk.com/media-centre/2021/10/access-to-pension-transfer-advice-set-to-decline-further-without-action-by-regulators-and-pension-schemes-new-research-from-lcp-and-aviva/