Planning for retirement depends upon DB transfer

Decked

I appreciate there are lots of posts ref DB transfers, I am interested to see if anybody has experience of a situation similar to mine.

I'm 55, wife is 52, I have £460k Cetv DB plus £235k DC, My wife has £350k Cetv DB plus £15k DC
We are hoping to retire in 3 years, our plans for retirement will depend very much on being able to transfer our DB pots into ones where can take out 25% tax free.
This will give us a nice amount of readily accessible cash should we wish to maybe do a big cruise, have some expensive holidays. maybe a few luxury purchases etc.
There is no intention to draw it all out and blow it, but just to give us the flexibility to do as we wish, also if we waited til later in life and drew DBs as a pension, we could end up with too much money at ages when we probably wouldn't be able to get the benefit from it. (particularly when our state pension kicks in)

Also, we can maximise tax free withdrawals for a number of years using our personal allowance.

DB transfers have changed a little over the last few years and I am concerned that we may not be allowed to do them (might just be me being over worried) so although we don't need to get this in place for another 3 years, I just feel that we should try and do it sooner rather than later, because at least we know where we stand.

In addition to growth on the above sums, further contributions should add another £50k plus growth to the pot. 

So, should I be pursuing these transfers now, to give me more clarity of what our retirement could look like?

We would have approx £55k left on the mortgage, which I may decide to pay by doing a couple of months work each year post age 58, not sure yet.

Thanks 

Dazed_and_C0nfused

our plans for retirement will depend very much on being able to transfer our DB pots into ones where can take out 25% tax free.

There is no pot with a DB pension, it's guaranteed income for life.  

Have you looked at starting with the DC pensions and then relying on the DB ones from their normal pension age?

Decked

The DB pot is the CETV transferred into DC schemes

The majority of the funds are held in the DB schemes, so not convinced we will be able to do what everything we want with the DC scheme (also, as that is in my name, it would mean paying tax on more of the funds we withdraw) Having the larger pots would enable both my wife and I to drawdown Approx £12.5k tax free each, on top of our 25% tax free lump sum, which we could probably reinvest (early days in the thought process)

Kim1965

Best research the many threads regarding cetv. Its not easily done and can be expensive trying and not succeeding. In the likely event that you are not allowed to transfer, beefing up the dc pots or taking reduced db benefits may be your plan b. 

Thrugelmir

What are your forecast DB pensions at NRA? 

Marcon

Given the problems you've had with money management in the recent past https://forums.moneysavingexpert.com/discussion/6048278/life-after-a-dmp-and-mortgage-application#latest and the fact you are looking at retiring while still relatively young, you are likely to have great difficulty in finding an IFA who will advise at all on a possible transfer - let alone recommend it.

Being on a DMP may well have taught you a lot about managing money, but having huge amounts of it readily available can resurrect old habits...and once the money has been spent, it's been spent. I appreciate that's a statement of the blindingly obvious, but it's something all too easily overlooked when the bank balance appears to have lots of lovely noughts on it (before the decimal point!), so forgive me for making it.

Malthusian

We are hoping to retire in 3 years, our plans for retirement will depend very much on being able to transfer our DB pots into ones where can take out 25% tax free.

With £250k in DC pots and another £50k to be added that doesn't really compute. To an outsider, if a £300k DC pot on top of a substantial guaranteed income isn't enough to fund cruises and holidays and you have to start carving chunks off the golden geese, that sounds a lot like "blowing the pensions".

If your wife's personal allowance is (partially) wasted that's a shame, but not the end of the world. Not using your personal allowance because you don't have to do a stroke of work anymore falls into the category of "nice problem to have". (Taking her DB scheme early would be worth looking at if the penalty isn't too great, particularly if you recoup some of the penalty via tax saved.) She could use the "marriage allowance" to transfer up to 10% of hers to you.

Could you boost her DC fund, if her earnings allow it?

If you have what looks like too much guaranteed income in later life, taking the DB pensions early would be a potential solution to that as well. (Although bear in mind that at that stage of your life, one of you might be a widow/er, losing the other's State Pension and a chunk of the DB income.)

A positive recommendation to transfer either DB pension seems unlikely on the face of it.

Transferring the DB pensions would give you less clarity, not more, as you would lose the guaranteed underpin to your retirement income.

I can't see DB transfers getting any harder than they are now. Equally I wouldn't expect it to get any easier in three years. There is no noticeable political will to reverse the consistent trend of the last 30 years by making it easier to cash in DB schemes.

Albermarle

One compromise ( and probably more sensible ) solution would be for one of you to transfer out their CETV, and the other one to keep their DB pension .
On the other hand as said above , it is probably unlikely that either of your will be able to transfer , so the whole plan is probably dead in the water anyway .

Dyesie

Yep my circumstances not dissimilar to yours.  Spoke to numerous advisors with fee's often upwards of £10k whether you get a recommendation or not.   Understandably they did not want to pre-empt any outcome but general opinion seemed to be if its a significant sum and the primary source of retirement income it would be unlikely to get a transfer recommendation.   Transferring just one DB pension would reduce risks and improve potential to recommend a transfer.  Suspect you will find an IFA to go down this route if you look hard enough.  As yet we have not pursued the option. While I understand the non-contingent charging model the level of fees makes a big pill to swallow in the hope you get the outcome you want.  

Retireinten

The challenge is finding someone to approve the transfer and accepting you'll need deep pockets to fund it. As you have CETVs I assume you can transfer your DB funds out, not all allow this so best to check. 

In your position I would work out what annual income you want to live on as a couple once retired and then compare this to your DB income at various ages, taking into account acturial reductions. 

Does this get you want you need to fund your lifestyle ignoring big, luxury spends. And at what age are you when the DB figures stack up to support retirement? 

Personally I would be taking the guaranteed income from the DBs and use the DC funds for the luxuries, assuming this is affordable.

Marcon

Retireinten said:

The challenge is finding someone to approve the transfer and accepting you'll need deep pockets to fund it. As you have CETVs I assume you can transfer your DB funds out, not all allow this so best to check. 

Not up to DB schemes to allow or not allow transfers - there is a statutory right to do so up until 12 months before the scheme's normal retirement age, and OP is clearly well below that.

Edit: should have said that unfunded public sector schemes don't (thanks to eagle posters who spotted my omission!)