Advice

Gordoch67

Hi

So I need a little advice if possible.   I have a current pension which I am still paying into with local government and also have a pension from previous employment.  My question is this.  Someone advised me to cash in my old pension and pay off my mortgage with it.  however as this is a defined benefits pension which the company holding it tell me I cant do that and if I did want to do it I would have to transfer it out to a different type of pension scheme, but because there is over £50k in the pot have to get advice from a financial advisor  who is authorised by FCA which will cost aver £3.5k.  So now I'm unsure what to do.  I am just looking for ideas here if anyone can help.  I am also considering moving it into my current pension scheme if I cant touch it

MX5huggy

If your current pension scheme is LGPS you can only transfer a pension into it with in the first year of service. 

DB to DC transfers, there’s many threads on here. Basically don’t bother enjoy what you have. 

dunstonh

So I need a little advice if possible

No advice given on this site. Just discussion and comment only.

Someone advised me to cash in my old pension and pay off my mortgage with it.

If that was an adviser, you could probably get compensation for bad advice.  If it was a friend or colleague then you need to stop listening to them.

however as this is a defined benefits pension which the company holding it tell me I cant do that and if I did want to do it I would have to transfer it out to a different type of pension scheme, but because there is over £50k in the pot have to get advice from a financial advisor  who is authorised by FCA which will cost aver £3.5k. 

And the adviser would tell you that its totally wrong to do it and wouldn't let you.

So now I'm unsure what to do.  I am just looking for ideas here if anyone can help.  I am also considering moving it into my current pension scheme if I cant touch it

Why do you need to anything?  You cant touch your current pension scheme either.

Stop listening to people giving you duff ideas.  

xylophone

I am also considering moving it into my current pension scheme if I cant touch it

Will LGPS permit? Are you within twelve months of joining (or your authority has a concession)?

https://www.lgpsmember.org/your-pension/paying-in/transferring-in/

Contact your pension fund to find out more about the pension transfer process. You will generally have 12 months from joining the LGPS to opt to transfer your previous pension.

With regard to a transfer out of your old DB pension to a DC Scheme, see 

https://www.gov.uk/government/publications/pension-benefits-with-a-guarantee-and-the-advice-requirement/pension-benefits-with-a-guarantee-and-the-advice-requirement

https://forums.moneysavingexpert.com/discussion/6301481/gaining-control-over-my-pension/p1

Gordoch67

Thanks guys that's actually helped me a lot

Marcon

Gordoch67 said:

Hi

So I need a little advice if possible.   I have a current pension which I am still paying into with local government and also have a pension from previous employment.  My question is this.  Someone advised me to cash in my old pension and pay off my mortgage with it.  however as this is a defined benefits pension which the company holding it tell me I cant do that and if I did want to do it I would have to transfer it out to a different type of pension scheme, but because there is over £50k in the pot have to get advice from a financial advisor  who is authorised by FCA which will cost aver £3.5k.  So now I'm unsure what to do.  I am just looking for ideas here if anyone can help.  I am also considering moving it into my current pension scheme if I cant touch it

For the benefit of other readers - the relevant figure is £30K, not £50K (and it refers to a Cash Equivalent Transfer Value; a DB scheme has no 'pot').

jim8888

From just about everything I've read on pensions, cashing in a DB pension, especially a substantial one, is almost always a bad idea.

LHW99

Another thing to consider - Your current DB pensions will almost certainly have some kind of widow(er)'s pension after you pass away (maybe 50%), and also often pay out a dependent's pension until eg any children are adults.

These additional benefits would cost a lot to buy on the open market, and if you have a spouse / civil partner, would they be happy managing a large cash pot for drawdown if you did cash one in?

Re-mortgaging to a fixed rate deal, if you can find a cheaper one, may well a be better option