DB Pension transfer..a no brainer?

C_Mababejive

 still contributing to a DB pension. Also have a SIPP with about 60k in it.

Transfer value circa £1m, no dependents.

Transfer seems a no brainer. Am i missing anything?

Thrugelmir

Someone needs to manage the £1m of investments.........

You are also very close to the LTA. 

JoeCrystal

Besides the treatment for a DB pension scheme is far more generous than a DC pension scheme under LTA.

Dazed_and_C0nfused

C_Mababejive said:

Aged almost 60, still contributing to a DB pension. Also have a SIPP with about 60k in it.

Transfer value circa £1m, no dependents.

Transfer seems a no brainer. Am i missing anything?

Maybe, maybe not.

But we're missing what you would be giving up in return for the £1million

£10k/year with no lump sum might make it very attractive.

£50k/year inflation proofed with £150k PCLS less so

C_Mababejive

I cant say exactly without checking but benefit to date might be around 24k pa without taking a TFLS. I'm aware of my close proximity to the LTA and i dont fully understand the implications and any actions i might be able to take to mitigate it. Just keep the SIPP fully invested and march on/make money or seek to throttle gains in the SIPP? Marching on seems the better option?

JoeCrystal

Do you even need the money? A pension of £24k plus state pension is quite a comfortable income already! Even more, if it is index-linked.

*sighs*, I really need to find a job with a DB pension scheme. 

Dazza1902

What's the normal pension age for it ?
It would seem getting them transferred is a problem.

Linton

C_Mababejive said:

I cant say exactly without checking but benefit to date might be around 24k pa without taking a TFLS. I'm aware of my close proximity to the LTA and i dont fully understand the implications and any actions i might be able to take to mitigate it. Just keep the SIPP fully invested and march on/make money or seek to throttle gains in the SIPP? Marching on seems the better option?

The LTA calculation values a DB pension as 20X the annual income plus the lump sum.  So it would seem you are well below the LTA.

ukdw

If your CETV multiple is >40x then definitely worth considering, even if it pushes you into LTA territory. LTA implications can be taken into account by reducing multiple a little bit to take into account the lost 25%.

If investments hold up long term, then at a 40x multiple, you would probably be able to drawdown at least 50%-75% more than would be available from your DB, plus probably also have a much larger tax free lump sum available.

The main downsides to transferring are finding and paying for an IFA who can be convinced to give you a positive recommendation.  Then if successful, having to think a fair bit more about investment risks and drawdowns levels, tax etc. for the rest of your life, including occasional stress during market downturns!
Plus if unsuccessful having to pay quite a bit of money out of taxed savings for the negative recommendation.

Alternatively, If you take the DB you will pretty much be able to completely forget about pensions and investments for the rest of your life as long as the DB is enough and inflation doesn't breach any DB limits by too much.  You may however have the occasional 'what if I had taken the CETV?' reflections!

NoMore

IFA unwilling to recommend DB transfer... — MoneySavingExpert Forum

DB Pension transfer but to where ? — MoneySavingExpert Forum

Do you get a cetv at this time ever year ? You seem to ask the same question annually at about this time. Anything changed, in the past year since your last replies. If not then the answers aren't going to change either.

Albermarle

I cant say exactly without checking but benefit to date might be around 24k pa without taking a TFLS.

I would suggest it is a good idea to get a firmer handle on this figure .