Access to Defined Benefits Pension

Sheba42

Silvertabby said:

Sheba42 said:

Silvertabby said:

When did you leave the LGPS?  If you left before April 1997, then that complicates things as you will have a GMP.

If you left after April 1997, however, and as long as this really is your only pension (apart from the State pension) then you MAY be able to take these benefits under trivial commutation rules.  ie, a one-off lump sum of which 25% is tax free.  But I say MAY with caution, as a trivial commutation is only possible if the notional value of your benefits is under £30K.  Note that this is a different calculation to the CETV, and you are going to be very close if not over.  You will have to ask your LGPS if you meet the criteria.

If you do have a GMP (left before April 1997) then you won't be able to trivial commute before GMP age ( still 60 for a woman), by which time a couple more years of cost of living increases will certainly tip you over the limit.

If trivial commutation is not possible, then transferring your LGPS benefits to a SIPP/personal pension would involve jumping through many hoops and paying a high fee for the necessary advice.  

Thanks for replying Tabby, I'm just rereading your previous reply about this Trivial thing.   I left my job in 2008 so no GMP then.  My husband has just said that if I got a TC then I'd need to pay tax on that, whereas if I just move the money to a SIPP I can take 19.5k right away and that will be tax free. 

Then he says I could take the remaining 8.5k next year and I wouldn't pay tax on that either as it's a new tax year. 

Why would moving it to a SIPP involve high fees and hoops though ?  Isn't it under 30k so I wouldn't need to pay to have financial advice ?
Or has that all changed now ? 
Appreciate your input, thanks. 

If a trivial commutation isn't possible then it may be that your CETV creeps above the £30K limit before you can transfer.  Factors are age related amongst everything else.  

You are so close to the wire it's very difficult to say anything for sure.

The CETV won't change though as I can only ask for one per year.  So I have 3 months to decide what to do with it. 

I think I'll need to find somewhere to transfer it too now.  

Lemon_dr1zzle

The CETV definitely can change, just because you can only ask for one a year doesn’t mean it won’t change for another year. 

Sheba42

Lemon_dr1zzle said:

The CETV definitely can change, just because you can only ask for one a year doesn’t mean it won’t change for another year. 

It says it won't change though.  Only if I take longer than the 3 months  👍

Sheba42

xylophone said:

If the value of the safeguarded benefits is under £30,000 then you are not required to take advice in respect of the transfer.

https://assets.publishing.service.gov.uk/media/5a80b577ed915d74e33fbf54/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Just make sure that your chosen provider is happy to accept the transfer as anecdotal evidence suggests that some may be unhappy about accepting such a transfer without advice.

https://www.ftadviser.com/pensions/2020/11/06/providers-still-demand-advice-on-sub-30k-db-transfers/#:~:text=AJBell requires advice on all,an execution-only service”.

The above is four years old but you might check in with AJ Bell? It may be inferred that their position is still as indicated?

https://www.ajbell.co.uk/transferring-to-us

Thank you.  Looks like AJ bell might be where we should go.  Do you know if we can transfer to a type of SIPP that isn't invested in shares or anything?
Is there such a think as a SIPP which is just like a bank account so my money won't go down like it could if it's invested ?  Thanks 🙏

Edit, I think someone mentioned a SIPP like this in my last post so I'm off to look again. 

Dazed_and_C0nfused

Sheba42 said:

xylophone said:

If the value of the safeguarded benefits is under £30,000 then you are not required to take advice in respect of the transfer.

https://assets.publishing.service.gov.uk/media/5a80b577ed915d74e33fbf54/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Just make sure that your chosen provider is happy to accept the transfer as anecdotal evidence suggests that some may be unhappy about accepting such a transfer without advice.

https://www.ftadviser.com/pensions/2020/11/06/providers-still-demand-advice-on-sub-30k-db-transfers/#:~:text=AJBell requires advice on all,an execution-only service”.

The above is four years old but you might check in with AJ Bell? It may be inferred that their position is still as indicated?

https://www.ajbell.co.uk/transferring-to-us

Thank you.  Looks like AJ bell might be where we should go.  Do you know if we can transfer to a type of SIPP that isn't invested in shares or anything?
Is there such a think as a SIPP which is just like a bank account so my money won't go down like it could if it's invested ?  Thanks 🙏

You don't have to invest the money within a SIPP if you don't want.

Some providers pay interest on cash balances within a SIPP.

Remember your cash would "go down" in real terms if held in cash as inflation will gradually erode it's value.

p00hsticks

Brie said:

A DB pension should send you a annual or biennial statement that outlines what you might be entitled to at retirement.  

I'm not sure that that's true for DB pensions - I have one now in payment and one still to come and although I got/get updates on how the pension scheme itself is doing (i.e. is it overfunded, underfunded, total funds currently coming in and going out, expected liabilities) I haven't had a statement personal to me in particular since the one I was sent on leaving the company, and was under the impression that I shouldn't expect to receive another until close to the Normal Retirement Age.

Sheba42

Dazed_and_C0nfused said:

Sheba42 said:

xylophone said:

If the value of the safeguarded benefits is under £30,000 then you are not required to take advice in respect of the transfer.

https://assets.publishing.service.gov.uk/media/5a80b577ed915d74e33fbf54/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Just make sure that your chosen provider is happy to accept the transfer as anecdotal evidence suggests that some may be unhappy about accepting such a transfer without advice.

https://www.ftadviser.com/pensions/2020/11/06/providers-still-demand-advice-on-sub-30k-db-transfers/#:~:text=AJBell requires advice on all,an execution-only service”.

The above is four years old but you might check in with AJ Bell? It may be inferred that their position is still as indicated?

https://www.ajbell.co.uk/transferring-to-us

Thank you.  Looks like AJ bell might be where we should go.  Do you know if we can transfer to a type of SIPP that isn't invested in shares or anything?
Is there such a think as a SIPP which is just like a bank account so my money won't go down like it could if it's invested ?  Thanks 🙏

You don't have to invest the money within a SIPP if you don't want.

Some providers pay interest on cash balances within a SIPP.

Remember your cash would "go down" in real terms if held in cash as inflation will gradually erode it's value.

Yes, that's what I want, a cash SIPP so I can just transfer it, then immediately withdraw 19k tax free.  We just looked on AJ website but couldn't find a cash SIPP though.  I'll go look again. 

LHW99

If AJ Bell won't take it, I believe if you open a stakeholder pension (Standard Life?), they have to accept a transfer. I think someone here said you only need about £20 to open one, but you need to do it before trying to transfer. 

Once transferred, then you could move it on to AJ Bell, or another provider, if the stakeholder isn't flexible enough to do what you want.

Sheba42

p00hsticks said:

Brie said:

A DB pension should send you a annual or biennial statement that outlines what you might be entitled to at retirement.  

I'm not sure that that's true for DB pensions - I have one now in payment and one still to come and although I got/get updates on how the pension scheme itself is doing (i.e. is it overfunded, underfunded, total funds currently coming in and going out, expected liabilities) I haven't had a statement personal to me in particular since the one I was sent on leaving the company, and was under the impression that I shouldn't expect to receive another until close to the Normal Retirement Age.

I've had one every year since I started my job.  Tells me everything except CETV. 

Dazed_and_C0nfused

Sheba42 said:

Dazed_and_C0nfused said:

Sheba42 said:

xylophone said:

If the value of the safeguarded benefits is under £30,000 then you are not required to take advice in respect of the transfer.

https://assets.publishing.service.gov.uk/media/5a80b577ed915d74e33fbf54/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Just make sure that your chosen provider is happy to accept the transfer as anecdotal evidence suggests that some may be unhappy about accepting such a transfer without advice.

https://www.ftadviser.com/pensions/2020/11/06/providers-still-demand-advice-on-sub-30k-db-transfers/#:~:text=AJBell requires advice on all,an execution-only service”.

The above is four years old but you might check in with AJ Bell? It may be inferred that their position is still as indicated?

https://www.ajbell.co.uk/transferring-to-us

Thank you.  Looks like AJ bell might be where we should go.  Do you know if we can transfer to a type of SIPP that isn't invested in shares or anything?
Is there such a think as a SIPP which is just like a bank account so my money won't go down like it could if it's invested ?  Thanks 🙏

You don't have to invest the money within a SIPP if you don't want.

Some providers pay interest on cash balances within a SIPP.

Remember your cash would "go down" in real terms if held in cash as inflation will gradually erode it's value.

Yes, that's what I want, a cash SIPP so I can just transfer it, then immediately withdraw 19k tax free.  We just looked on AJ website but couldn't find a cash SIPP though.  I'll go look again. 

There is no such as a "cash SIPP".

What you want is a SIPP (or personal pension or stakeholder pension, but not many of them left I don't think) and once your money is within that pension wrapper you simply leave it as cash.

That isn't a "cash SIPP" though, it's a SIPP where your money is left as cash.

And you need to check the SIPP fees to make sure you don't choose one that is sub optimal for your particular plan.