Defined Benefit PensionTransfer

Hi wondering if anyone can help... is there anyway to avoid expensive fees from IFA if I want to transfer DB pension to drawdown facility?
I understand they are trying to protect people but it seems wrong that I have to pay 6% to transfer £65k pension pot.

Comments

  • dunstonh
    dunstonh Posts: 119,379 Forumite
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    edited 22 January at 5:36PM
     is there anyway to avoid expensive fees from IFA if I want to transfer DB pension to drawdown facility?
    Yes.   You can use an even more expensive FA.

    I understand they are trying to protect people but it seems wrong that I have to pay 6% to transfer £65k pension pot.
    That seems like a reasonsble fee.   £3900 is at the lower end for such a high risk transaction that is likely not to be in your best interests.  Typically fees are closer to £5k-£10k


    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • jimjames
    jimjames Posts: 18,544 Forumite
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    Hi wondering if anyone can help... is there anyway to avoid expensive fees from IFA if I want to transfer DB pension to drawdown facility?
    Avoid the fees by sticking with the DB pension? 
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Albermarle
    Albermarle Posts: 27,395 Forumite
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    Type 'DB transfer' into the search box at the top of the forum.

    There were a lot more threads on the subject in the past when CETV's were high. Now they have dropped 50%, the interest in transferring out has waned. 
  • MarkCarnage
    MarkCarnage Posts: 700 Forumite
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    Hi wondering if anyone can help... is there anyway to avoid expensive fees from IFA if I want to transfer DB pension to drawdown facility?
    I understand they are trying to protect people but it seems wrong that I have to pay 6% to transfer £65k pension pot.
    The fee you quote is not particularly expensive in the context of that specialist high risk (for the IFA) market.

    It may 'seem wrong' to you, but a number of people have shown considerable ignorance of the whole CETV methodology and process on this forum and would very probably have had an adverse outcome had they transferred. Is that £65k figure very recent? 

    There was a period of several years when the rationale for transferring was stronger - that isn't the case any more and for the great majority it is now not likely to be a good idea so the chances are very high that any advice you did get would be against it. 
  • MallyGirl
    MallyGirl Posts: 7,175 Senior Ambassador
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    Hi wondering if anyone can help... is there anyway to avoid expensive fees from IFA if I want to transfer DB pension to drawdown facility?
    I understand they are trying to protect people but it seems wrong that I have to pay 6% to transfer £65k pension pot.
    The fee you quote is not particularly expensive in the context of that specialist high risk (for the IFA) market.

    It may 'seem wrong' to you, but a number of people have shown considerable ignorance of the whole CETV methodology and process on this forum and would very probably have had an adverse outcome had they transferred. Is that £65k figure very recent? 

    There was a period of several years when the rationale for transferring was stronger - that isn't the case any more and for the great majority it is now not likely to be a good idea so the chances are very high that any advice you did get would be against it. 
    You would still have to pay for the advice even if it was against the transfer
    I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
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  • Mick70
    Mick70 Posts: 740 Forumite
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    never under estimate a "stress free" retirement which a DB will offer you mind 
  • Cobbler_tone
    Cobbler_tone Posts: 891 Forumite
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    Trouble is that people see a £3k a year pension and struggle to reconcile that against the 'lure' of £60 odd grand lump sum. It is often a short sighted view but I understand it.
    So many considerations...are they desperate for cash? what other provisions do they have? do they want spousal protection? do they understand the fees involved and tax implications?

    I have learnt a lot in the past 12 months (on here) regarding the fluctuating values of CETV's, the costs involved in advice and the security that DB pensions bring. The bit I wrestle with (but fully understand) is the optimum timing of taking it but I guess without knowing my 'end date' you'll never know it. 
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 17,286 Forumite
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    Mick70 said:
    never under estimate a "stress free" retirement which a DB will offer you mind 
    Wise words indeed!
  • daveyjp
    daveyjp Posts: 13,424 Forumite
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    edited 23 January at 10:57AM
    A DB pension is a 'draw down' facility.  You receive a risk free guaranteed draw down payment every month for life.
    .
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