Pension Advisor would want £21,000 for a failed transfer

michael1234

Sorry just attached the personalised notes which I have a feeling get to the crux of what the DB pension is worth. Is the £6191 paid per annum or is it the total value? Even the former still seems a lot less than the DC?

Marcon

michael1234 said:

That's not a stakeholder pension, and your 'other' one won't be unless it actually says it is.

Opening one is very easy indeed and will cost you the princely sum of £16 (to which tax relief will be added, bringing it up to a grand total of £20!). Up to you who you choose, but if you are really determined to transfer, then Aviva is one provider still open to new retail (ie without the need for an adviser to be involved) stakeholder business: https://static.aviva.io/content/dam/document-library/adviser/pensions/sp01006.pdf

It's quite a lengthy form but you just need to answer the parts which apply to you (no adviser or employer involved, which keeps things pretty straightforward).

You'll need to receive regulated advice before the transfer can proceed, but as you will see from Section 6 of the form, the outcome of that advice won't stop you proceeding. Hopefully you'll be able to find someone who will do the necessary work for much less than £21K.

penners324

Sounds like a scam to me.

wjr4

If you’re wanting to transfer out, see an IFA. Never use SJP. 

Marcon

wjr4 said:

If you’re wanting to transfer out, see an IFA. 

...but whoever you use, could we please get away once and for all from this idea that it's a 'success' if your adviser 'manages' to get DB benefits with a CETV of £30,000+ transferred out. Surely success is where someone is enabled to take a fully informed decision, and then act on it.

Facts:

1. Advisers have never been the spoilsport 'gatekeepers' as they have often been portrayed, particularly on this site. They have been hamstrung by increasingly onerous FCA strictures and crippling PI insurance costs, which is why so many of them have relinquished their FCA permissions to advise on transfers from DB schemes.
2. When full advice has been given, the adviser must sign the necessary confirmation they have done so - known as a Section 48 certificate.
3. If someone has received full (as opposed to abridged) advice, and they have a statutory right to a transfer from a scheme with safeguarded benefits, the transfer can normally proceed whatever the advice says, provided the receiving scheme will accept the transfer. The exception is where the trustees of the ceding (paying) scheme identify certain risk factors in the proposed receiving scheme, in which case the transfer may be delayed or blocked to help protect members from falling victim to a scam.
4. Stakeholder pensions must accept any transfer from a UK registered pension scheme. That has been the position since stakeholders were introduced over 20 years ago, was confirmed in the 2015 Treasury consultation and remains the case still.
5. At the time of writing there are stakeholder providers open to new retail business. An individual can therefore apply direct to the provider to open one - easy to do by post, with a cheque for £16. They can then arrange their own transfer (with no adviser involvement beyond the provision of a Section 48 certificate, which enables the DB scheme to pay out the transfer - so no need for any 'insistent client' process). Given the tight timeframes involved with DB transfers, it makes sense to have the stakeholder pension set up before beginning the process.

None of the above is to suggest that transferring is necessarily a good idea...if you've paid for advice, it might make sense to pay heed to it!

hyubh

michael1234 said:

Sorry just attached the personalised notes which I have a feeling get to the crux of what the DB pension is worth. Is the £6191 paid per annum or is it the total value?

£6191 p/a, with some level of inflation proofing, probably CPI up to 5%. Given the terminology used ('RST pension'), I would also expect a widow/er pension on death.

Even the former still seems a lot less than the DC?

On the information given, I imagine the fund value quoted in your other screenshot is not in addition to the DB benefits, but to fund them, or rather, to (ideally) fund a better version of them (i.e. the required annuity you mentioned earlier). This is a different scenario to a more contemporary notion of a hybrid pension (e.g. the modern USS - scheme for university lecturers), where the DB and DC parts are genuinely separate from each other.

I suggest your next step isn't hiring a financial advisor, but getting the scheme administrator to explain what your benefits in the scheme actually are. Only once you have that information should you even consider taking seriously that SJP glorified sales rep...

Pat38493

As others have said, you don't need to use a very expensive tied company for this.  You can use an IFA and your charges will be much cheaper.  The advice should be the same either way as they are obliged to look at the situation objectively as to whether it's in your interests or not.

Maybe for this particular scheme it would turn out to be in your interests to transfer out, but most of the time it's not.  

michael1234

hyubh said:

michael1234 said:

Sorry just attached the personalised notes which I have a feeling get to the crux of what the DB pension is worth. Is the £6191 paid per annum or is it the total value?

£6191 p/a, with some level of inflation proofing, probably CPI up to 5%. Given the terminology used ('RST pension'), I would also expect a widow/er pension on death.

Even the former still seems a lot less than the DC?

On the information given, I imagine the fund value quoted in your other screenshot is not in addition to the DB benefits, but to fund them, or rather, to (ideally) fund a better version of them (i.e. the required annuity you mentioned earlier). This is a different scenario to a more contemporary notion of a hybrid pension (e.g. the modern USS - scheme for university lecturers), where the DB and DC parts are genuinely separate from each other.

I suggest your next step isn't hiring a financial advisor, but getting the scheme administrator to explain what your benefits in the scheme actually are. Only once you have that information should you even consider taking seriously that SJP glorified sales rep...

The DB element acts as an "underpin" which has been explained to me to mean that should the DC element be insufficient to provide the DB part (presumably this inflation proofed £6191) then it would be guaranteed that the pension would pay out at least the DB part.

You are correct about the widower pension which no doubt would make it even harder to transfer.

I have spoken at length to the pension administrator and it was they who referred me to this sjp person (!).

I am now thinking about the stakeholder pension and finding the best value transfer person I can as suggested by one or two others in this thread.

Not sure whether to string the sjp along until I see some initial advice or tell him now I don't want to go along with it.

wjr4

michael1234 said:

hyubh said:

michael1234 said:

Sorry just attached the personalised notes which I have a feeling get to the crux of what the DB pension is worth. Is the £6191 paid per annum or is it the total value?

£6191 p/a, with some level of inflation proofing, probably CPI up to 5%. Given the terminology used ('RST pension'), I would also expect a widow/er pension on death.

Even the former still seems a lot less than the DC?

On the information given, I imagine the fund value quoted in your other screenshot is not in addition to the DB benefits, but to fund them, or rather, to (ideally) fund a better version of them (i.e. the required annuity you mentioned earlier). This is a different scenario to a more contemporary notion of a hybrid pension (e.g. the modern USS - scheme for university lecturers), where the DB and DC parts are genuinely separate from each other.

I suggest your next step isn't hiring a financial advisor, but getting the scheme administrator to explain what your benefits in the scheme actually are. Only once you have that information should you even consider taking seriously that SJP glorified sales rep...

The DB element acts as an "underpin" which has been explained to me to mean that should the DC element be insufficient to provide the DB part (presumably this inflation proofed £6191) then it would be guaranteed that the pension would pay out at least the DB part.

You are correct about the widower pension which no doubt would make it even harder to transfer.

I have spoken at length to the pension administrator and it was they who referred me to this sjp person (!).

I am now thinking about the stakeholder pension and finding the best value transfer person I can as suggested by one or two others in this thread.

Not sure whether to string the sjp along until I see some initial advice or tell him now I don't want to go along with it.

Don’t string them along. Say their charges are too high and you’re going to see an IFA instead! 

dunstonh

I have spoken at length to the pension administrator and it was they who referred me to this sjp person (!).

Once upon a time, they wouldn't have done that.   They would told you to seek an IFA.   However, some of have got into bed with the sales companies.

I am now thinking about the stakeholder pension and finding the best value transfer person I can as suggested by one or two others in this thread.

There are only three stakeholder pensions open for business still.     Once in the stakeholder, you would likely transfer it again from the stakeholder to a more modern option.     Stakeholder pensions are on their last legs.   Depending on what happens in the budget or the pension review, they may no longer be available after that.