Pension value halved

pm2023

Just looking to see if I am missing something here...
I have a preserved pension which is a guaranteed £7500 per annum.
Thinking about transferring the pension (it is an ex employer) I got a valuation 2 years ago and it was just over £200k, 6 months ago it was valued at £155k. Now my valuation is £115k

I appreciate the recent pensions/government debacle, but is this kind of drop to be expected ?

molerat

A CETV is not a value of the pension so much as a cost to the provider to pay that pension.  Due to the rise in returns from investments the provider does nit need as much money in its coffers to pay that pension so the CETV has dropped.  The days of massive CETVs are over.

jimi_man

I’m not too sure what the recent pensions/government debacle is or was but in relation to CETVs which is what you are referring to (I think) their value has plummeted over the last year for various reasons. 

Your £7500 a year should still be £7500 a year though, so your ‘pension value’ hasn’t halved. 

bostonerimus

Yes, given the recent rises in interest rates. 

Troxy

You also need to keep in mind that transferring a DB pension is expensive and very very difficult to do

pm2023

Thanks for the replies so far.

Yes, saying my pension has halved is probably a bit misleading - sorry ! I appreciate the annual income is still the same.

My thoughts about transferring the pension are due to the company I earned it with looking a bit shaky financially. It is covered by the PPF, but I assume that will only cover a certain percentage if the worst happens.

Linton

pm2023 said:

Thanks for the replies so far.

Yes, saying my pension has halved is probably a bit misleading - sorry ! I appreciate the annual income is still the same.

My thoughts about transferring the pension are due to the company I earned it with looking a bit shaky financially. It is covered by the PPF, but I assume that will only cover a certain percentage if the worst happens.

Yes with the PPF, you get 90% if  you are below pension age when the original scheme fails, 100% if above.  There is a 2.5% cap on inflation rises when in payment and IIRC you may not get non-statutory benefits such as inflation increases for pre-1997 pensions.

JoeCrystal

Assumption? Read up on PPF to be sure on what you will get. Beside, it could be scheme is well off enough that it doesn't need to go into PPF.

Eldi_Dos

OP , one way to look at it is if you have a three bedroom property and the market rises it does not become a four bedroom and if the market value falls it does not become a two bedroom.

At your stage I would concentrate on improving pensions, as 7.5k +NSP might not be enough by the time you get there

Albermarle

Troxy said:

You also need to keep in mind that transferring a DB pension is expensive and very very difficult to do

And even more difficult, and even less worthwhile,  now the CETV values have dropped so much.

dunstonh

pm2023 said:

Just looking to see if I am missing something here...
I have a preserved pension which is a guaranteed £7500 per annum.
Thinking about transferring the pension (it is an ex employer) I got a valuation 2 years ago and it was just over £200k, 6 months ago it was valued at £155k. Now my valuation is £115k

I appreciate the recent pensions/government debacle, but is this kind of drop to be expected ?

You are not missing anything.   CETVs were artificially high having more than doubled after the credit crunch.   They have now returned back to their normal range.

The events of 2022 had their footings in events from over a decade ago.  So, not that recent.

CETVs are largely irrelevant to most people.