Defined benefit transfer woes

Neddyslad

Hello everybody.  First timer on here. I have a defined benefits pension worth 50k that I would like to transfer to a more flexible pension scheme before I retire. Because it is a closed scheme I can only take a fixed annuity and would have to live to 90 to make this worth doing. Ill health means this isn't going to happen. I can transfer the pot but have to take financial advice as its over 30k.
The problem is the charges I am being quoted. Literally 10% of my pot and everybody wanting to "manage" my finances. I just want to stick it into a low cost, low risk managed fund and pay a sensible one off fee.
Any ideas ?

eskbanker

As covered in many threads over on the dedicated pensions board, advising people to transfer in such circumstances is a risky transaction for the advisers (and their insurers in particular), so they charge accordingly (and many choose not to take such work on at all). 

Having said that, even with a relatively small pension like this, you should be able to beat 10%/£5K if you shop around - make it clear that you're not looking for ongoing servicing, as there's no obligation to buy this if you don't want it.

Edit: here's a much lower (albeit subsidised) figure quoted a few minutes ago:

https://forums.moneysavingexpert.com/discussion/comment/78588620/#Comment_78588620

Thrugelmir

Neddyslad said:

 I just want to stick it into a low cost, low risk managed fund and pay a sensible one off fee.

Which may well underperform your guaranteed annuity from the pension scheme. Low risk carries a significant premium at the moment in terms of the price of suitable assets. 

Diplodicus

The tacit exchange for a positive recommendation is that you sign up for ongoing advice - so double whammy - or you waste £5k for an adviser to tell you to do nothing.

Leave the pension where it is. Not ideal but, for the sum involved, it's not crucial, and the advantage you give yourself is extra income if fortune grants you a long life!

dunstonh

Because it is a closed scheme I can only take a fixed annuity 

DB schemes dont use annuities.

 and would have to live to 90 to make this worth doing. 

That is highly unlikely on a DB scheme.  So, this suggests your sums are not adding up and you are missing something.

The problem is the charges I am being quoted. Literally 10% of my pot and everybody wanting to "manage" my finances

5k is a reasonable figure for a DB transfer.   For many firms it would be around £5k whether you had £50k or £500k.  You could probably get it down to £3500 with a bit of shopping around.

Financial Advisers are able to see that you are in a relatively vulnerable position for transferring, and will prey on that. 

Rubbish.   Vulnerable persons is another FCA concern. They recently published a paper on it and firms are likely to be more focused on it than usual.  

The tacit exchange for a positive recommendation is that you sign up for ongoing advice - so double whammy - or you waste £5k for an adviser to tell you to do nothing.

There is a possibility that a recommendation not to transfer would be the outcome.   The CETV is low, if the health is poor but not life-threatening coupled with misunderstanding what the DB pension does, it could well be a recommendation not to transfer.

Neddyslad

Thanks for comments so far. Thought I'd put this in pensions section doh!
I'll repost correctly asap

Diplodicus

5k is a reasonable figure for a DB transfer.  


Reasonable compared to what? 
Four years Council Tax.

Neddyslad

Diplodicus said:

5k is a reasonable figure for a DB transfer.  


Reasonable compared to what? 
Four years Council Tax.

Or 4 house moves!

dunstonh

Diplodicus said:

5k is a reasonable figure for a DB transfer.  


Reasonable compared to what? 
Four years Council Tax.

No point repeating your moans on another thread.  You have polluted enough of them in the pensions section already.  See previous answers

Diplodicus

How is it that you skew the conversation to say that someone challenging your statement 5k is a reasonable figure for a DB transfer is a troll and a polluter? 

Unlike you and your 109,000 posts supporting your position, I gain nothing for stating my view.

tebbins

The fact that people are required to pay significant sums of money, to access something that is recognised as their property, is frankly suspicious and I am surprised it has not been quashed in a judicial review. The financial industry already makes more than enough from managing, advising, consulting, auditing, valuing etc. our pensions without needing to charge that much for even more advice that is clearly not wanted by persons such as the OP (who would be welcome to choose to seek such advice were the requirement to do so removed), and of debatable necessity or value (that obviously varies on a case by case basis).
I understand and support the intent behind whatever legislation or rule requires this, however the same effect could be acheived by a free consultation with Pension Wise/Citizen's Advice, setting some required reading/a test etc. It is not beyond the wits of the regulators to come up with a fairer solution.