CETV what to do with it ?

Bimbly

Gary1984 said:
...how pension schemes work. It's a collective undertaking. 

I prefer to think of it as an insurance policy. I mean, you spend money on insuring your house in case it burns down. Hopefully your house with never burn down and you'll never see that insurance money again. But if it does burn down, you will get that money back and much more.

In pensions, it should even out so the people who die early cost the pension scheme less than the people who live longer. Does that mean that the people who die early lose out? Not at all. Because without this averaging, the cost of the scheme would be a lot more. Indeed, everybody wins because they all have a guaranteed income until death. Whenever that comes. They have all insured themselves against poverty in old age.

Perfo

Gary1984 said:

Perfo said:

The pot could be almost gone by the time I'm 85 I'm not looking to protect the whole investment for eternity. ?But even if there's only £5 left I'd want it rather than the pension scheme having it away with it .. 

I don't think you're thinking with a clear head here. You'd rather give up very good guaranteed benefits and risk running out of money at 85 in order to...? What exactly? Get all 'your' money out? That's just not how pension schemes work. It's a collective undertaking. If you die earlier than expected your excess contributions pay the pensions of your colleagues.  Is that what you mean by 'having it away with it'.  The scheme doesn't have a bundle of fivers with your name on it that you can lay claim to.

Sure you can take the CETV but you won't know if you would have got even more from staying in the scheme until you're dead. You might be saving them a lot of fivers by taking the CETV and then living to 100.

And are you taking the scheme rules salary definition a bit personally perhaps? Just retire or withdraw from the scheme within the next 7 years and maintain your higher salary definition. That should give you a generous guaranteed pension with a State Pension to follow.

I probably am being a bit grumpy about it all.   I can’t really make any further thoughts on it until I get the CETV .  When starting on this thought journey I did indeed think.  Add what I’ve paid in, to what my company has paid in and include a bit of compound interest and that’s my pot which will continue to grow unless I drawdown but will disappear altogether if I pop. Ie my estate may not get anything back from my investment if me and the good lady demise. I know it’s prolly a moot point now but investing 2m wouldn’t result in me running out of cash at 85. indeed unless I was particularly irresponsible with my spending  and or the gap between interest rates an RPI does something strange I’d be left with a considerable amount plus I’d still have the state pension. 

Bimbly

Maybe you just need to pay for the advice and listen to what they say. It isn't cheap, but if it will help you make the right decision, it'll be worth the peace of mind. If the advice is not to transfer, it will be difficult to go against that advice, however.

If it were me, I'd take the certainty of a regular income above the worry about dealing with investments. But I am not you.

Perfo

I didn’t consider the liability angle as it would seem reasonable to only hold them accountable for bad advice not someone ignoring it and doing something silly.   I suppose I’m being slightly unfair as well if it really does  take many many hours.  I am a member of a big scheme and for an experienced expert I wouldn’t have thought there were a fantastic amount of unknowns to calculate or things they haven’t seen before.  However I’ve never done one so am talking completely without facts.. 

QrizB

Perfo said:

I know it’s prolly a moot point now but investing 2m wouldn’t result in me running out of cash at 85.

No-one here really thinks you're getting £2M.

Your pension scheme has offered you £35k pa and £200k PCLS at age 55. You (or the scheme, on your behalf) could buy a £35k pa RPI-linked annuity for about £1M, or quite a bit less than that if there's a cap on the annual inflation increase.

I would suggest that the maximum value of your pension is something like £1.2M, and the floor could be as low as £800k. That's still a lot of money but it's not £2M.

dunstonh

 knew it wouldn’t be cheap but how many hours would it take an expert to work out and tell me the options what hourly rate do they charge ?

hours would be well into double digits and likely include multiple staff.  However, the main drivers are the risk of advice in that area.   Its the highest risk transaction that an adviser can do.  Its one that the regulator has shown some moving of the goal posts over the years and one that scares PI insurers and sends the PI insurance sky rocketing, not just in that year but every single year thereafter.

 I would imagine that even though it is a mine field for me it would be pretty standard stuff for someone in the trade….

Only around 1 in 10 advisers do it.     So, no, its not.

  I can’t really make any further thoughts on it until I get the CETV .

And just remember that if its £2m now, then that means it was over £4m 18 months ago.    It would put your transfer value in the top 1% of the country.   So, I think you really do need to wait for what it comes out at.

Perfo

QrizB said:

Perfo said:

I know it’s prolly a moot point now but investing 2m wouldn’t result in me running out of cash at 85.

No-one here really thinks you're getting £2M.

Your pension scheme has offered you £35k pa and £200k PCLS at age 55. You (or the scheme, on your behalf) could buy a £35k pa RPI-linked annuity for about £1M, or quite a bit less than that if there's a cap on the annual inflation increase.

I would suggest that the maximum value of your pension is something like £1.2M, and the floor could be as low as £800k. That's still a lot of money but it's not £2M.

When you say no one on here thinks I'm getting 2M that includes me.   I did when I started and thus all the thoughts nut not now. I spoke again to some other people that had been down this path.  On my annual active benefits statement on 5th April 2022 I have a thing called Statutory Value of Benefits  which is £962,000 ish .  The chap I spoke to today said when his was £700,000 he was offered 1.2M as the CETV and he thought it was a multiplier of the £700,000 ie Roughly 1.7 times.  The chaps that thought it was up to 3 times this figure did it a few years before that..  is it anything to do with this figure ? 

Perfo

dunstonh said:

 knew it wouldn’t be cheap but how many hours would it take an expert to work out and tell me the options what hourly rate do they charge ?

hours would be well into double digits and likely include multiple staff.  However, the main drivers are the risk of advice in that area.   Its the highest risk transaction that an adviser can do.  Its one that the regulator has shown some moving of the goal posts over the years and one that scares PI insurers and sends the PI insurance sky rocketing, not just in that year but every single year thereafter.

 I would imagine that even though it is a mine field for me it would be pretty standard stuff for someone in the trade….

Only around 1 in 10 advisers do it.     So, no, its not.

  I can’t really make any further thoughts on it until I get the CETV .

And just remember that if its £2m now, then that means it was over £4m 18 months ago.    It would put your transfer value in the top 1% of the country.   So, I think you really do need to wait for what it comes out at.

Ok, I retract my implied £5k was a scam.... of course it would still hurt though but then I'm a member of this forum as unnecessarily spending £5.00 hurts enough :-) .  I am definitely waiting to see the figure but have managed my expectations somewhat.  Now a dream figure of £4m would have been really something to enjoy worrying about and no doubt some made the most of it during the glory days.  What are the best indicators that the CETVs are on the way up or down ? is it RPI ? inflation etc ?   For example if I let it be this year what sort of indicators would I look at before getting another evaluation done ? I can do one a year and have seven years before the deadline. 

dunstonh

What are the best indicators that the CETVs are on the way up or down ?

Gilt yields.

 For example if I let it be this year what sort of indicators would I look at before getting another evaluation done ?

We are back in the long term average ballpark now.   There is no expectation of any return to pre 2022 CETV levels.   You would need inflation much lower, the economy in a good state and interest rates back to near zero levels.  

shortseller09

Have a look at this link:

https://www.xpsgroup.com/what-we-do/technology-and-trackers/xps-transfer-watch/xps-transfer-value-tracker/