Should I transfer my SIPP into CS Alpha?

PensionNewbs

Hello

I'm late 40s and recently started with the CS. I currently have about £170k in a Sipp and a similar amount in ISAs. My husband has about £800k in various DC pensions.

I'd like to retire late 50s. Would I be better off keeping my £170k in a Sipp or moving it into Alpha? I know the Sipp is more flexible and I can potentially leave it to my kids, while Alpha is more reliable and will give me a guaranteed income for life. I'm in good health.

Is there anything I'm missing? I feel this should be a no-brainer as guaranteed index-linked income is really valuable, but am I missing something? 

GunJack

Why not gets quote for transferring in part of your sipp in, say £100k leaving the rest as is? Then you can decide if it's worth it to you personally, as everyone's situation is different

Andy_L

The CS pension will be (heavily) reduced for taking it ~10 years early. CS pension have a retirement age that tracks state pension age (ie currently 67)

The SIPP if kept separate could be used to bridge that 10 years using drawdown

Or, if its transferred the increase could be enough to offset that reduction

You need to get a quote for Tx to be able to judge

dunstonh

I'd like to retire late 50s. Would I be better off keeping my £170k in a Sipp or moving it into Alpha? I know the Sipp is more flexible and I can potentially leave it to my kids, while Alpha is more reliable and will give me a guaranteed income for life. I'm in good health.

Have you modelled the differences?
i.e. using the SIPP to fund the gap until you commence the DB pension without the reduction vs transferring the SIPP into the DB pension and taking a hit on the reduction?

Albermarle

One issue is that you will only have 10 years in the CS pension when you want to retire, and then as said it will be significantly reduced for retiring early, so unless you are a high earner the final pension may not be that great. So maybe best to bump it up, but its not so easy to have a black and white answer.
Another point is that as a couple you already have a lot of DC pension assets, so more guaranteed income could be a better balance to more risk based assets.

Suzycoll

PensionNewbs said:

Hello

I'm late 40s and recently started with the CS. I currently have about £170k in a Sipp and a similar amount in ISAs. My husband has about £800k in various DC pensions.

I'd like to retire late 50s. Would I be better off keeping my £170k in a Sipp or moving it into Alpha? I know the Sipp is more flexible and I can potentially leave it to my kids, while Alpha is more reliable and will give me a guaranteed income for life. I'm in good health.

Is there anything I'm missing? I feel this should be a no-brainer as guaranteed index-linked income is really valuable, but am I missing something? 

I started in CS just before i was 40 and part retired mid 50;s and my CS pension is rubbish. If you are now in your late 40s and plan to take your CS pension when you are late 50's it will not be as generous as you think it will be (depending on your job grade), that's if you don't top it up. If you go on to the civil service website there is a calculator you could use for projected pension.

as previous suggestions you need to do the math really . Could you maybe withdraw part of your SIP and put it into your civil service pension maybe ?

jdl920p

I was in a similar position to you a few years go, joined the civil service after a number of years in the private sector.  I decided to leave my old DC pensions in place as I can flexibly access them from my mid 50s if I wish.  Alpha retirement date is 67 for me and if I draw it sooner then the would be reduced significantly. I am now back in the private sector and pumping as much as I can into DC scheme

(As an aside the CS changed from Nuvos to Alpha whilst I was there so I have both types of CS pension, Nuvos retirement date is 65)

So the way I look at it is that my DC pensions will provide me with flexibility on when I retire and how much I take.  My civil service DB pension(s) will provide me with a guaranteed income once I reach my mid 60s that will supplement my DC pensions (and provide a backstop in case I blow all my DC pension on fast cars and crypto)

michaels

On average you might be a little better off with a sipp invested in equities but at the expense of higher risk.

The key question seems to be whether you consider yourself and your husband as a single financial unit.  If so then he already has lots of flexible DC so between you maxing DB would make sense.  However as an individual it would seem to make sense for you to keep a decent proportion of your retirement assets in DC so you have a balance between low risk and flexibility.

MX5huggy

You need to get the quote from the Alpha scheme for what they will give you for the transfer before thinking about it any more. 

Suzycoll

michaels said:

On average you might be a little better off with a sipp invested in equities but at the expense of higher risk.

The key question seems to be whether you consider yourself and your husband as a single financial unit.  If so then he already has lots of flexible DC so between you maxing DB would make sense.  However as an individual it would seem to make sense for you to keep a decent proportion of your retirement assets in DC so you have a balance between low risk and flexibility.

good answer Michaels. I personally would not let my husband to be a financial unit with me. Anything can happen in the future and if you divorce the husband can get a portion of your pension. 
maybe that's because I'm divorced though !!!!  - ha