Transfer value of £100k or £2k pa pension

dunstonh

I'm tempted to ask a pension advisor "If I invested £100k in a drawdown pension for 15 years, what would be my estimated figures at retirement?"  I'd bet it would be more than £2k pa.

Why 15 years?  Plus, you cannot drawdown on it at your age.
Is that £2000 after the payment of the tax free cash? (if so, how much is that)
What indexation applies to the £2000?
Is that £2000 when you last had a benefit statement or the current position? 

If you are after an index linked income from £100k in drawdown then you are probably looking at a draw rate of around 2%. So, £2000.  Possibly less unless you can afford to take the required level of investment risk.

Alexland

bennyuk said:

So I'm thinking, if I take the £102k and transfer it into a new drawdown pot, I'd assume a 5% growth pa, so after 5 years (to take me to 65, as an example) that would be worth £207k.

I'm assuming that's 15 years, not 5 years, but a 5% compound return above inflation and fees looks very optimistic at current asset valuations especially if you would be derisking the allocation in the 5-10 years leading up to the withdrawal.

[Deleted User]

Are you sure it is a pure Defined Benefit pension, if not do you get to choose the funds it is invested in (I had one of these quirky ones)

xylophone

I worked for a blue chip company for 3 years back in 95-98, paid into a pension (no idea how much)

The Scheme was almost certainly "contracted out" - if so, you will have a GMP.

What does your statement of deferred benefits on leaving the scheme show (post 88 GMP/excess)?

What does the Scheme Guide say concerning how GMP/excess revalue in deferment/payment?

sandsy

Dazed_and_C0nfused said:

In theory it's possible the £2k could be

1). The value at the point you stopped being a member of the scheme

2). The value now 

3). A projected value at NPA for that scheme

Until you know for certain you could be comparing apples and pears.

Do you know the answer to this question? It makes a huge difference!

bennyuk

Old thread but I finally got the details from the Capita.

A full estimated retirement pension of £2,014.24 per annum.
or

A reduced estimated retirement pension of £1,579.63 per annum and the maximum estimated tax free Pension Commencement Lump Sum (PCLS) of £10,530.71.

Transfer value (as of  29 Apr 2022) has gone down to £ 94,354

Still, 17 years till retirement I would expect £90k to go further than £2k per year. I'm in no way happy with this, I have other pension/savings in place, and I am resolute that I want to transfer out of this pension.

So do you think I'll be able to find someone who can transfer this pension for me? Or do I have to resign myself to have it stay where it is?

Thanks for any advice.

NannaH

Unless you are terminally ill or have an alternative very large pension provision then you won’t be able to transfer as no advisor would give a recommendation. 

You will be throwing away money for negative advice. 

Milltir

This is the FCA guidance https://www.fca.org.uk/consumers/pension-transfer-defined-benefit.

HappyHarry

NannaH said:

Unless you are terminally ill or have an alternative very large pension provision then you won’t be able to transfer as no advisor would give a recommendation. 

You will be throwing away money for negative advice. 

OP, suggest you ignore this comment, it is not correct.

Thrugelmir

bennyuk said:

 I'd assume a 5% growth pa, 

Five months on. Do you feel as confident in your assumptions now?