Willis Towers Watson - Lloyds - HBOS Final Salary Pension Scheme

jstev74

I have a pension held by the above. It is a old work pension with the Bank of Scotland who transferred it to Lloyds. It is under the HBOS Final Salary Pension Scheme

I turm 55 in October and would like to take 25% in cash, the pension pot has a value of £104k.

I have asked Lloyds by email if I can take the 25% but can never get a proper answer. All is get is a summary of my pension by email or letter with no definitive answer. I called them once and the bloke rattled on so I gave up.

Has anyone dealt with them before and is it possible?

I am thinking of transferring to Pensionbee which no doubt will be another hurdle.

Thanks

eastcorkram

When you say you asked Lloyds, is that what you mean? Or did you ask WTW??

Brie

I think the problem is that you don't necessarily have the right to take a 25% tax free lump sum from a final salary (DB) scheme.  There is likely a tax free lump sum available but not necessarily 25%.   The value of the pension is not important - what is is what pension it would provide.  It may be that you cannot take it at 55, but I suspect you can but at a discount for taking it early.  So what you need to do is to email them again and state you are considering taking the pension in October and can they please send you the amounts you might be paid with and without a tax free lump sum.  They then should send you a big pile of paper of which on 2 or 3 pages will be outlined the info you are looking for.

And I'll suggest you stop thinking of transferring it to PensionBee or anywhere else.  You'll need to pay an adviser to check if this is a good idea, which might cost you (by recent random chats) up to £10k all of which is most likely to lead to the conclusion that it is not advisable and therefore a transfer is ruled out.  There are normally way too many good things about a DB scheme that a normal pension pot will never be able to provide.  The only time it may be allowed is if you have some horrible life threatening illness and are unlikely to live to spend it all.  

WTW......I have 3 pensions with them from 3 employers.  What a joy they are to deal with.  Depending on which pension is being discussed as they're dealt with by different teams and all subject to different rules.  



And on a completely unrelated subject ..... are you aware of the Bank Worker's Charity?  Doesn't sound like you need their help but it's a good thing to pass along to colleagues perhaps.  I did check but it doesn't look like they do pension advice of any type but they do some financial & legal advice.   
The Bank Workers Charity (bwcharity.org.uk)

xylophone

an old work pension.......                       It is under the HBOS Final Salary Pension Scheme.

Then you have a deferred Defined Benefit Pension. You do not have a pot - you have the promise to pay benefits based on salary and years of accrual.

Your pension does have a CETV which presumably is what you mean by the £104.000.


https://www.lloydsbankinggrouppensions.com/documents/scheme_docs/hbosfs/scheme_summary.pdf

A Deferred Member of the Scheme is a person that is not an Active Member of the Scheme or being paid a pension, but who still has benefits in the Scheme (typically a former employee who has yet to start to receive their pension or a current employee who has chosen to leave the Scheme).

If you leave, then you will be entitled to a deferred pension. This will be based on your Pensionable Service and Final Pensionable Pay at the date you leave the Scheme. Your deferred pension would then increase, for each full year until you retire, broadly in line with annual increases in a National Inflation Index called the Consumer Prices Index (subject to a maximum, typically 5% a year)

These increases are required under legislation and have changed in the past. This means that some of your pension which you have already built up for earlier Pensionable Service may increase at a different rate.

These increases would not form part of your Annual Allowance2 

 2 The Annual Allowance (AA) is the total amount of pension savings you can build up or contribute in a tax year without paying an additional tax charge 

WHEN YOU TAKE YOUR PENSION

 

The Scheme’s Normal Retirement Age is 60 or 62 (unless you have been notified that yours is different) and this applies to both Active Members and Deferred Members.

With the Trustee’s consent, you may retire at any time from age 55. If you are able to retire from age 50, we will have written to you to let you know this.

Your pension will be reduced to take account of the fact that it will be paid for longer. The reduction applied to any early retirement pension for a Deferred Member is different to that applied for an Active Member

With the agreement of the Group, you are able to draw your pension at any age, subject to satisfactory medical evidence.

Your pension will be reduced to allow for the fact that it is likely to be paid for longer period than if you had retired at your Normal Retirement Age. 

You can take up to 25% of the value of your pension as a cash lump sum, within the Lifetime Allowance (LTA)1. This is currently tax free.

You may be able to apply to have any pension you are entitled to under a Former Scheme postponed past your Normal Retirement Age. This may be at the discretion of the Trustees and/or the Employer, depending on the rules of the Former Scheme, please see your Former Scheme Guide for more information.

If you choose to take a cash lump sum, your annual pension will be reduced. However, taking cash from the Scheme will not reduce the amount of any Spouse’s pension payable on your death after taking benefits. 

With regard to a transfer out of the scheme to a pension offering flexible benefits,  your pension has "safeguarded benefits  valued in excess of £30,000.

You will need to read

https://www.gov.uk/government/publications/pension-benefits-with-a-guarantee-and-the-advice-requirement/pension-benefits-with-a-guarantee-and-the-advice-requirement

The advice of a pension transfer specialist is not cheap - think thousands rather than hundreds.

Marcon

Brie said:

And I'll suggest you stop thinking of transferring it to PensionBee or anywhere else.  You'll need to pay an adviser to check if this is a good idea, which might cost you (by recent random chats) up to £10k all of which is most likely to lead to the conclusion that it is not advisable and therefore a transfer is ruled out.  There are normally way too many good things about a DB scheme that a normal pension pot will never be able to provide.  

It is always possible to transfer to a stakeholder pension, and there are several stakeholder pension providers open to new (direct) business. Advice is still required before the ceding scheme can transfer the funds if the transfer value is £30K or more.

Brie said:

The only time it may be allowed is if you have some horrible life threatening illness and are unlikely to live to spend it all.  

Normally it is ALWAYS allowed where someone has a CETV within its guarantee period; the requirement is to receive advice, not to follow it. Financial advisers are not gatekeepers, and people like you who repeatedly write posts suggesting they are really don't help anyone. As for transferring out with a life-threatening illness - there are potentially major tax considerations which would make transferring out a bad idea.

Please stop posting incorrect 'information'. 

jstev74

eastcorkram said:

When you say you asked Lloyds, is that what you mean? Or did you ask WTW??

I spoke with someone from WTW.

jstev74

Thanks for the reples everyone. I will call them again tomorrow.

They did send a quote with the following. This was an early retirement quotation for when I am 55.

I read it as i could take a 27k lump sum on that date.

 

molerat

Not too bad a commutation rate for the lump sum, giving up £1126.90 taxable pension for £27381.81 tax free lump sum, a rate of 24.3.

dunstonh

I turm 55 in October and would like to take 25% in cash, the pension pot has a value of £104k.

That would mean its not a defined benefit scheme.  DB schemes do not have a fund value and don't get 25% Tax free cash.

I have asked Lloyds by email if I can take the 25% but can never get a proper answer. All is get is a summary of my pension by email or letter with no definitive answer. I called them once and the bloke rattled on so I gave up.

Does the scheme support income drawdown?   Most older workplace pensions do not.

They did send a quote with the following. This was an early retirement quotation for when I am 55.

That indicates you do have a DB scheme.   So, you don't get 25% tax free cash and you don't have a pot value of £104k.

I read it as i could take a 27k lump sum on that date.

Financially, that doesn't look like a good idea.

How much is the "penalty" for taking the pension early?

eastcorkram

Those figures are similar to mine, though yours is a little higher. The commutation rate is similar. I will be applying to WTW this December to take this pension, when I reach 65, the NRD for it. 

I'm not confident of that going well, given the way people talk about WTW. 

xylophone

That indicates you do have a DB scheme. 

The OP specifically references

I have a pension held by the above. It is a old work pension with the Bank of Scotland who transferred it to Lloyds. It is under the HBOS Final Salary Pension Scheme

That is a DB Scheme - see link above.