Should I transfer my SIPP in the civil service scheme?

I'm 48. Recently joined the civil service and they've given me a transfer value of £12k per annum for my £170k SIPP.

I am planning to retire within 10 years. As well as contributing to the civil service scheme I'm hoping to buy £8k extra pension, so my total civil service pension from 67 should be around £30k if I do the transfer. I'll also get state pension.

I'm also paying into the L&G scheme and have various share ISAs. I should have around £600k in total (across DC pension and ISAs) which I intend to live on between retiring at 57 and taking my DB pension at 67.

My husband is the same age as me and hoping to retire early as well. He has a DC pot (about £700k) and about £200k in S&S ISAs.

My feeling is that I should do the transfer, as £30k guaranteed and index linked offers excellent security and will allow us perhaps to stay invested with our DC pots and ISAs.

Any advice gratefully received. Thank you.


Comments

  • Marcon
    Marcon Posts: 10,571 Forumite
    First Post First Anniversary Name Dropper Combo Breaker
    ece9600 said:
    I'm 48. Recently joined the civil service and they've given me a transfer value of £12k per annum for my £170k SIPP.

    I am planning to retire within 10 years. As well as contributing to the civil service scheme I'm hoping to buy £8k extra pension, so my total civil service pension from 67 should be around £30k if I do the transfer. I'll also get state pension.

    I'm also paying into the L&G scheme and have various share ISAs. I should have around £600k in total (across DC pension and ISAs) which I intend to live on between retiring at 57 and taking my DB pension at 67.

    My husband is the same age as me and hoping to retire early as well. He has a DC pot (about £700k) and about £200k in S&S ISAs.

    My feeling is that I should do the transfer, as £30k guaranteed and index linked offers excellent security and will allow us perhaps to stay invested with our DC pots and ISAs.

    Any advice gratefully received. Thank you.


    As with all DB/DC questions, it's security and certainty v flexibility and opportunity (good and bad!).

    Work out your priorities - and it sounds from your post as if you have - and there's your answer.
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • hugheskevi
    hugheskevi Posts: 3,819 Forumite
    First Anniversary Name Dropper First Post Car Insurance Carver!
    It looks like your thought process is quite comprehensive.

    Just one thing you may wish to consider is late commencement of alpha pension. If you take the pension after Normal Pension age then there is an actuarial uplift applied. 

    This could, for example, be used to not transfer in, and instead use the DC pensions to fund the period between Normal Pension age and when you commence the pension. As DC pension has much better death benefits compared to alpha deferred pension, that might be attractive to cover off the risk of early death. You would be bearing investment risk during the period, compared to the guaranteed benefits of alpha, but that can go either way - if you return more than CPI+1.7% after costs from the DC investments you would be better off than alpha, and if is later-life risks you are seeking to reduce then the risk earlier in life may not be so important.
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