How do I convince a financial adviser to sign off on my pension transfer?

MrsOystercatcher

hyubh said:

MrsOystercatcher said:

The adviser has had details of all my pensions but so far,  I have been covered by their free advice session [...] but then their compliance manager emailed me today to say that they were not aware that it was a Final Salary pension that I want to transfer

Oh dear, you got what you paid for then Free advice session or not, hardly the greatest advert for their services!

My LGPS pension's transfer value is £85k and the April 2024 statement says that my lump sum as of now would be £10,560 and annual payment of £3,520.   I left the LGPS in April 2009.

Hmm, so presumably most of the pension has rule of 85 protections (you don't state the joining date, but I'm assuming around 10 years membership). From an 'optimise the LGPS pension' POV, would be best to rent for another 5 years then draw the LGPS pension at 60, commuting some pension for more lump sum if that was needed for the flat purchase (commuting an LGPS pension for the sake of it is a bad idea, but that wouldn't apply here).

If I am able to take a lump sum now,  I would be perfectly happy to leave the rest where it is until retirement, but is that possible and I how would I go about it?

Not possible as others have said, alas.

Very much not the best advert for them!! I joined the LGPS scheme in 2004 so only 5 years' membership. 

I hadn't really considered renting again now as if I'm going to buy,  I feel it probably needs to be now.....we have been very lucky with our current rental but there are so many sh** landlords out there, and there's no security.  I'm also not sure what sort of mortgage I'd get at 60 but thanks for the input, it's given me more food for thought. 

FIREmenow

MrsOystercatcher said:

FIREmenow said:

MX5huggy said:

Presuming your Local Government pension is part of the Local Government Pension Scheme then the minimum age to access it is 55 ask them for the quote for taking it now. 

I agree with this. How many years service do you have in LGPS?

Very rough figures based on your April 2024 amounts: 
Pre April 2008 service, normal retirement age should be 65yrs max.
Taking pension 10yrs early reduces pension by 35.5% and lump sum by 15.5%
So roughly £2270 per year and £8,920 lump sum.

You can get an exact quote based on your pension history, and they can give further options such as increasing the lump sum through commutation.

Some info here: https://www.lgpsmember.org/your-pension/planning/taking-your-pension/

Thanks so much, this is very helpful.   It was 5 years service.    It seems like a lot of money to lose if I take the pension early.......

Early retirement factors are designed to be roughly comparable over an average life span - they are reduced, but they are also paid out for a longer retirement.

So starting at 55 on reduced annual pension compared to retiring at 65 with the amount from your last quote, the crossover point where you would have had the same total annual pension out of both would be 84 years old at around £66k in today's money. Slightly older if including lump sum.

I didn't think rule of 85 would apply, but @hyubh is much more knowledgeable than I on LGPS! If you can take pension unreduced at 60, that is about £85.5k paid out in annual pension at age 84, which you wouldn't get from the reduced pension until you were 92.

When you start adding it up, you can see why LGPS would offer an £85k CETV to get you off their books in case you live a long life!

Silvertabby

2004 to 2029 = 25 years (deferred membership counts as well as actual service) 

25 + (age) 60 = 85

Would need fine tuning for actual dates/age, but possible that pre 2008 accruals would meet R85 and therefore paid in full from age 60 (with bit of post April 2008 being reduced for payment before 65).

FIREmenow

Silvertabby said:

(deferred membership counts as well as actual service) 

Thanks @Silvertabby that explains it. I joined LGPS in 2007 so rule of 85 passed me by!

For the OP, would the early retirement factor therefore only be 5 years for any pension meeting R85? Or do you have to wait until 60 to benefit?

Silvertabby

FIREmenow said:

Silvertabby said:

(deferred membership counts as well as actual service) 

Thanks @Silvertabby that explains it. I joined LGPS in 2007 so rule of 85 passed me by!

For the OP, would the early retirement factor therefore only be 5 years for any pension meeting R85? Or do you have to wait until 60 to benefit?

R85 ended for new entrants after October 2006.

Even though some people met R85 in their mid 50s, it only kicked in from age 60 for members (although the actual R85 date factored in behind-the-scenes calculations).  So, leaving at 55 would mean a 5 years early payment reduction in pre April 2008 benefits.