CETV DB transfer to pay off Mortgage? Good sense, too risky or just not allowed?

Dazed_and_C0nfused

joeriki said:

Gary1984 said:

Also I note you're a fair bit off full state pension. Buy as many additional years NI contributions as you can between now and retirement. Absolutely nothing beats it as an investment. Get a part time job doing anything to either get your stamps paid by an employer or get the cash to pay them yourself.

I have been meaning to do this. This is the push I need. Looking at this it seams paying from now til 2034 makes sense but paying the 18 years back pay does not as it only adds 15 quid (if I am reading this right?) I have quite bad adhd so I am, lost on everything. Just trying to tidy it all up!  Thanks

Where are you getting £15 from?

joeriki

Marcon said:

Your main problem is going to be getting financial advice at all, given you are non-resident. That alone would scupper the possibility of transferring - the DB scheme cannot progress the transfer without proof you have received such advice.

I found a company located in Spain that said they would do it. sjb-global  But the guy said he could but did not think it would be the best way forward. Were gonna do a fact find and see what happens. I was innitially 100% keen but after all the info in here I think I was over reacting to interest rate risk. I think they will strugle to go really high due to recessionary pressure. Thanks

joeriki

MovingForwards said:

Would £1.1m less outstanding mortgage, CGT, sale fees etc be enough to fund the rest of your life in whatever country you're living in, especially when the DB and state pension start to get paid?

Have you looked into ex-pat buy to let mortgages as they are available, that then frees up equity from the house.

I think so. But i do not have a solid history of financial management so feel good having money in property. However my plan was to see up in the strong market at the start of the year but was a few months too slow and I missed it. I'd rather wait for the next cycle. Despite what every one says I think we see higher property prices 5 years out. I have an April 2015 CGT valuation as a non-resident at 1.35m so my CGT will be zero. But I hear teh Gov can cancel that at any time and then im looking at a CGT from 1997 ratioed for time lived vs time rented so that would be a horror story. So keeping my eyes peeled

joeriki

You folks are so helpful. Its incredible I'm learning so much!

Brie

If you are talking about transferring a DB pension to Spain and then intend to liquidate it I would suggest you be incredibly cautious.  Off shoring a pension, particularly a DB, involves extra hoops to jump through all of which the pension scheme itself should be well aware.  There is the potential that the company in Spain will want a nice percentage (I've heard of up to 40%) which will reduce anything you might eventually receive.  And then if HMRC decides you are doing the wrong thing they will impose a tax of (trying to remember) 40%.  So if the value was judged to be £100k you lose £40k to the Spainish company and then have to pay HMRC £40k.  Which leaves you with £20k total.  Google QROPS to get all the current bumpf as my knowledge is from a few years back.  

Meanwhile - are you having everything possible paid into your flex mortgage account?  Even if rent is paid in and then goes out again a few days later that will lessen your monthly interest payment.  It might not be a lot each month but will nibble away at the "overdraft" and help you get down to zero quicker.  (yes I know it's not an overdraft but that's the way I think about my account which I've finally got into credit and and working hard to keep that way.)

Marcon

Gary1984 said:

Also you could perhaps split your DC into smaller pots and get most of it tax free using the small pots rule?

Using the small pots rule doesn't get 'most of it tax free' unless the person drawing the small pot has little or no potentially taxable income at the time they cash in a small pot. If you cash in more than one pot (and you can cash in up to 3 personal pensions in your lifetime) in the same tax year, you'll automatically put yourself into taxable territory if you have a standard tax code.

Gary1984

Ah I've misunderstood what the point of it is then. I've edited my earlier post.

Marcon

Gary1984 said:

Ah I've misunderstood what the point of it is then. I've edited my earlier post.

Just to clarify - a 'small pot' is a DC pension pot which must be worth no more than £10,000 at the time it is cashed in, and the person cashing it must specify to their pension provider that they want to use the 'small pots' regime. Providers won't necessarily assume that's the case (for example, someone may already have cashed in 3 small personal pension pots, so doesn't have scope to use the 'small pots' rule for any more personal pensions).

The main point of the 'small pot' regime is twofold: (a) it doesn't trigger the Money Purchase Annual Allowance, which would otherwise restrict someone to maximum gross contributions of £4K per annum in terms of any future DC savings; and (b) it uses 0% of the LifeTime Allowance - handy for anyone already at, or close to, hitting their LTA.

Albermarle

If you are talking about transferring a DB pension to Spain and then intend to liquidate it I would suggest you be incredibly cautious.

Or even more than incredibly cautious .........

joeriki

So before posting I was 100% for cashing in. Since, i've decided to not do it, I don't need to, I have enough equity, I think rates wont go as high as I thought. This seams like a great area to make mistakes and details are not my forte. I think i'll take the lump sum of 50k and 6k a year. The fact is pensions like these are insurance against catastrophe, like really poor ill health or injury that prevents work. To cash it in because rates might go high seams like a misuse of the facility. Thanks for all the input. Much appreciated.