Can safeguarded benefits be transferred to drawdown?

davehsug

Hi there.

My partner has just had his statement for a workplace pension. He left almost 30 years ago, and only worked there for 18 months, However, the pension is worth considerably more than expected.

He has options to take no lump sum and a £90 pm pension, or just under £5,000 and a £60 pm pension.

It was a final salary pension, so there is no full cash-in option. The statement says that there is a safeguarded benefits transfer amount of just under £22,000.

He doesn't really think that £60 or even £90 per month is of any great use, his health is not good, and much as it grieves me to say, living another 20+ years is unlikely.

Is it possible he could use the safeguarded benefits transfer to move to another provider's drawdown scheme, which would enable him to use the money as he wished?

He knows it does make the money more vulnerable, but the pension is capped at CPI with a maximum of 3% increase anyway, so he'd probably be better off if he could get the money into an ISA asap.

Any advice much appreciated, and thanks in anticipation.

xylophone

This pension is not with an unfunded public service pension scheme?

If it were, then a transfer to a scheme offering flexible benefits would not be possible.

Otherwise, as the safeguarded benefits are valued at under £30,000, he  is not legally obliged to take advice from a Pension Transfer Specialist before transfer to a scheme offering flexible access, a SIPP for example.

That said, certain providers will only accept transfer in of  a DB pension of any value if advice has been taken.

Example

https://www.fidelity.co.uk/approaching-retirement/transferring-final-salary-pensions/

However, AJ Bell appear less rigid in this respect.

https://www.ajbell.co.uk/faq/do-you-accept-final-salary-transfers

Assuming that he is aged 55 or over, once in the SIPP, he could take 25% of the value tax free - the balance would be taxable income.

davehsug

Hello and thanks for the answer. It's with a company called Briadstone, and he's 65 in January, which is why he had the forms as it's the retirement age for the scheme. I think he needs to contact them and ask what's possible. I think he should move quickly, as he's on ESA and will have half his personal allowance for this tax year and 2/3 of next year's that he could take advantage of. 

xylophone

Briadstone,

Do you mean Broadstone, the Pensions Administrator?

Remember that it is the receiving scheme that will organise the transfer in.

Has your husband obtained a state pension forecast?

https://www.gov.uk/check-state-pension

davehsug

Hi. Sorry, yes it's Broadstone. He will be entitled to the full state pension at 66.

Albermarle

 I think he needs to contact them and ask what's possible.

It seems that he already knows this .The statement says that there is a safeguarded benefits transfer amount of just under £22,000.

Contacting them could cause confusion. Probably better just to choose a pension provider that accepts DB pension transfers. Then register with them and start the transfer process. They will organise it, and if there are any issues arising then no doubt they will contact him. 

davehsug

Thank you so much. I've managed to read all of the very large pack he received. I've found that it does specifically have an option to request a full transfer statement, which I'd missed before, so he can go down this road and look for another provider, who offer a suitable account.