Has anyone succeeded transferring their BT pension into a SIPP?

Albermarle

ZPal said:

Thanks all.  Yes, I have a DB pension.  Reason for wanting to transfer is because I can make more money myself investing in a SIPP and have grown my other (smaller) pension which was easier to transfer by 30% in the last two years.  But I do realise share trading is a high risk and share prices can go either way... and as I have no significant savings, I expect an adviser will not recommend I transfer my BT pension, despite being able to show that my trading experience/skills are good (so far!).  I guess there's no point in spending ££££s only to be told they don't approve the transfer.  I might try shopping around to see if I can find an adviser who'll charge a smaller sum up to, say, £2,000....

There is s system called Triage ( as in the medical term ) The IFA will give your situation a once over and say either 1) there is little chance of a positive recommendation , so no point going further or 2) there is a possibility of a positive recommendation, if you move on to the full analysis but it is not guaranteed . I am not sure how many operate this system but clearly it will be cheaper, although not conclusive.

If you mention that you intend to trade shares with any transferred  money , then I guess that would be a red flag due to the high risk.

p00hsticks

ZPal said:

Thanks all.  Yes, I have a DB pension.  Reason for wanting to transfer is because I can make more money myself investing in a SIPP and have grown my other (smaller) pension which was easier to transfer by 30% in the last two years.  But I do realise share trading is a high risk and share prices can go either way... and as I have no significant savings, I expect an adviser will not recommend I transfer my BT pension, despite being able to show that my trading experience/skills are good (so far!).  I guess there's no point in spending ££££s only to be told they don't approve the transfer.  I might try shopping around to see if I can find an adviser who'll charge a smaller sum up to, say, £2,000....

The fact that you already have a DC pension that you are managing yourself, successfully or otherwise,  won't necessarily make it more likely for you to get a positiive recommendation. In fact it may work the other way, as thre's an expression 'don't put all your eggs in one basket', and the combination of a reliable inflation-linked DB pension alongsidde a more flexible DC one os ofter seen as the sweet spot to be in.

Albermarle

and the combination of a reliable inflation-linked DB pension alongsidde a more flexible DC one os ofter seen as the sweet spot to be in.

I fully agree !

arnoldy

Albermarle said:

and the combination of a reliable inflation-linked DB pension alongsidde a more flexible DC one os ofter seen as the sweet spot to be in.

I fully agree !

Most DB pensions offer very limited inflation linking. They are capped at 0%, 2.5% or 5% depending on when they were accrued. Even then rises are often depended on scheme funding - usually 105%.

With inflation projected at 7% this year most DBs will lose 3-4% value this year. that's a real worry if you are planning a 30 year retirement with a DB - you have no control over inflation - a DB is guaranteed to wither and die in high inflation. A DC may be better there, again not guaranteed either, but a least there is a chance of keeping up with inflation with a sensible investment strategy.

Albermarle

arnoldy said:

Albermarle said:

and the combination of a reliable inflation-linked DB pension alongsidde a more flexible DC one os ofter seen as the sweet spot to be in.

I fully agree !

With inflation projected at 7% this year most DBs will lose 3-4% value this year. that's a real worry if you are planning a 30 year retirement with a DB - you have no control over inflation - a DB is guaranteed to wither and die in high inflation. A DC may be better there, again not guaranteed either, but a least there is a chance of keeping up with inflation with a sensible investment strategy.

I think DB and DC pensions will all struggle to keep up with inflation at the moment . Most DC pensions are in negative territory for 2022 so far .

Silvertabby

arnoldy said:

Albermarle said:

and the combination of a reliable inflation-linked DB pension alongsidde a more flexible DC one os ofter seen as the sweet spot to be in.

I fully agree !

Most DB pensions offer very limited inflation linking. They are capped at 0%, 2.5% or 5% depending on when they were accrued. Even then rises are often depended on scheme funding - usually 105%.

With inflation projected at 7% this year most DBs will lose 3-4% value this year. that's a real worry if you are planning a 30 year retirement with a DB - you have no control over inflation - a DB is guaranteed to wither and die in high inflation. A DC may be better there, again not guaranteed either, but a least there is a chance of keeping up with inflation with a sensible investment strategy.

Depends on the scheme.  Public sector CPI increases are unlimited.

Pablo7474

I don’t think your investing experience will make much difference and I think anyone who believes their 30% return in the last two years demonstrates this could called naive. This is enough to make most IFAs run a mile. 

Marcon

ZPal said:

 Reason for wanting to transfer is because I can make more money myself investing in a SIPP and have grown my other (smaller) pension which was easier to transfer by 30% in the last two years.  But I do realise share trading is a high risk and share prices can go either way... and as I have no significant savings, I expect an adviser will not recommend I transfer my BT pension, despite being able to show that my trading experience/skills are good (so far!).  I guess there's no point in spending ££££s only to be told they don't approve the transfer.  I might try shopping around to see if I can find an adviser who'll charge a smaller sum up to, say, £2,000....

Many people believe the same thing - but then are first in the queue to lodge a complaint when they find it isn't as easy as they thought. What happens if we have a stock market crash (as opposed to a mere correction) and the value drops by 30% in two days - especially as you have no significant savings? 

No adviser is going to advise a transfer to a novice investor without substantial savings, or other assets they can liquidate if necessary, to see them through retirement. Two years of investing really isn't the sustained track record they would need to see to believe that you had good trading skills. 

ZPal

Points taken.  I guess my only significant financial 'safety net' is my house and I do expect to downsize when I retire, which will free up more capital.

One of the key reasons for wanting to move the pension, aside of my (possibly naive) belief that I can make better returns, is that I'd like to be able to leave the funds to my beneficiaries (no spouse or dependants).  Leaving it with BT, the pension will die with me, but a SIPP will be part of my estate.  
Also, I'm not completely unsupported with trading as am getting assistance from a well-seasoned family member who has been trading very successfully for many years, which is why I moved my smaller pension to start with.  With his guidance and assistance, I'm pleased with my results but totally take on board the risks.

Keep_pedalling

arnoldy said:

Albermarle said:

and the combination of a reliable inflation-linked DB pension alongsidde a more flexible DC one os ofter seen as the sweet spot to be in.

I fully agree !

Most DB pensions offer very limited inflation linking. They are capped at 0%, 2.5% or 5% depending on when they were accrued. Even then rises are often depended on scheme funding - usually 105%.

With inflation projected at 7% this year most DBs will lose 3-4% value this year. that's a real worry if you are planning a 30 year retirement with a DB - you have no control over inflation - a DB is guaranteed to wither and die in high inflation. A DC may be better there, again not guaranteed either, but a least there is a chance of keeping up with inflation with a sensible investment strategy.

The OP will be in section B of the BT pension scheme which is uncapped.