Defined Benefit Pension Transfer / Insistent Client Advice.

Vegasjay

Hi, I hope everyone is Ok. This is my first post and I’ll be very grateful for any advice or help with my questions as regards my defined benefit pension transfer and the insistent client process. As background I’ve got a defined benefits ( final salary / work ) pension with my old company that I paid into for only a couple of years ( 1996-1998 ). The pension is now being managed by Aptia. I’ve had a pension transfer value ( CETV ) of around £33,000 with a deadline of 15/5/25 to complete the transfer should I proceed with this. As it’s above the £30,000 limit I need to get independent financial advice as to whether it is in my interest to transfer this into a defined contribution pension or any other pension.

I’ve also received my retirement statement which says I’ll be paid £1600 per year ( monthly instalments of £133.60 ) or I can take a cash lump sum of £7700 plus a lower monthly payment of £96.74. I can’t take the cash lump sum unless I trigger the pension. 

I’m 61 years old now and not working but am a full time carer for my mum and have been since 2010 ( when I stopped working ) and only started claiming carers allowance since spring 2024. I don’t have any other form of income and am not working as I’m looking after my mum as I’m her sole carer as she is disabled and she is my responsibility. I don’t have any other pensions. My financial situation is not brilliant hence the decision to try to get my defined benefit pension transferred to a defined contribution pension or other pension so that I can use the money from this to live and also get me through to my state pension which kicks in 2030. I’ve got a 50 share in a property ( freehold and mortgage paid off ) which I’m also trying to sell at the moment to release my equity in this which will then provide the bulk of my retirement. Unfortunately the other party that owns the other half of the property does not want to sell so I’ve had no choice ( have tried everything to agree to a sale ) but to go to court for an order to sell. This is the main reason why I need to access my defined benefit pension. I’ve tried all other avenues and don’t want to take on any debt which I will not be able to pay back because of my financial situation. My family and friends have been very helpful but cannot help me with the solicitor / court fees involved with the order to sell ( around £10,000 to £15,000 ). 

I’ve approached one defined benefit pension specialist ( PensionWorks ) and I’ve explained my situation to them about why I need to access my pension but their abridged advice has been that it’s unsuitable for me to transfer out. I’m awaiting their decision on the insistent client process. I wanted to ask If anyone knows any other companies that specialise in defined benefit / workplace pension transfers specifically and any that deal with insistent clients. Pension works will charge £2995 for full advice if I go that route. Any advice help, guidance will be appreciated. 

I totally understand that I’ll be giving up my lifetime guarantee and income until I die but right now I don’t feel I have any other option with my situation and my finances. If and once I get the house sold it will free up around £325,000 / £350,000 which I can then use for my retirement and to provide and look after my mum. I’m also not sure about what type of pension I should transfer into or if the pension transfer companies do this or if I’m limited as to where and which type of pension I can transfer into or which will accept defined benefit transfers. I’d be grateful for any help or advice anyone can give me thanks.

Marcon

Vegasjay said:

Hi, I hope everyone is Ok. This is my first post and I’ll be very grateful for any advice or help with my questions as regards my defined benefit pension transfer and the insistent client process. As background I’ve got a defined benefits ( final salary / work ) pension with my old company that I paid into for only a couple of years ( 1996-1998 ). The pension is now being managed by Aptia. I’ve had a pension transfer value ( CETV ) of around £33,000 with a deadline of 15/5/25 to complete the transfer should I proceed with this. As it’s above the £30,000 limit I need to get independent financial advice as to whether it is in my interest to transfer this into a defined contribution pension or any other pension.

I’ve also received my retirement statement which says I’ll be paid £1600 per year ( monthly instalments of £133.60 ) or I can take a cash lump sum of £7700 plus a lower monthly payment of £96.74. I can’t take the cash lump sum unless I trigger the pension. 

I’m 61 years old now and not working but am a full time carer for my mum and have been since 2010 ( when I stopped working ) and only started claiming carers allowance since spring 2024. I don’t have any other form of income and am not working as I’m looking after my mum as I’m her sole carer as she is disabled and she is my responsibility. I don’t have any other pensions. My financial situation is not brilliant hence the decision to try to get my defined benefit pension transferred to a defined contribution pension or other pension so that I can use the money from this to live and also get me through to my state pension which kicks in 2030. I’ve got a 50 share in a property ( freehold and mortgage paid off ) which I’m also trying to sell at the moment to release my equity in this which will then provide the bulk of my retirement. Unfortunately the other party that owns the other half of the property does not want to sell so I’ve had no choice ( have tried everything to agree to a sale ) but to go to court for an order to sell. This is the main reason why I need to access my defined benefit pension. I’ve tried all other avenues and don’t want to take on any debt which I will not be able to pay back because of my financial situation. My family and friends have been very helpful but cannot help me with the solicitor / court fees involved with the order to sell ( around £10,000 to £15,000 ). 

I’ve approached one defined benefit pension specialist ( PensionWorks ) and I’ve explained my situation to them about why I need to access my pension but their abridged advice has been that it’s unsuitable for me to transfer out. I’m awaiting their decision on the insistent client process. I wanted to ask If anyone knows any other companies that specialise in defined benefit / workplace pension transfers specifically and any that deal with insistent clients. Pension works will charge £2995 for full advice if I go that route. Any advice help, guidance will be appreciated. 

I totally understand that I’ll be giving up my lifetime guarantee and income until I die but right now I don’t feel I have any other option with my situation and my finances. If and once I get the house sold it will free up around £325,000 / £350,000 which I can then use for my retirement and to provide and look after my mum. I’m also not sure about what type of pension I should transfer into or if the pension transfer companies do this or if I’m limited as to where and which type of pension I can transfer into or which will accept defined benefit transfers. I’d be grateful for any help or advice anyone can give me thanks.

You don't need to be an insistent client. You need to receive advice before the DB scheme can pay over a transfer, but you don't need to follow that advice. It's likely that only a stakeholder pension will take the transfer (it has to - but you still need advice before the DB scheme can proceed with the transfer). 

See https://forums.moneysavingexpert.com/discussion/6556908/pension-advisor-would-want-21-000-for-a-failed-transfer#latest and read my post of 28 September 2024.

I'm sure I don't need to add that whether it's a good idea to transfer is another matter altogether, but that's entirely your decision. You haven't asked for my views on your situation, so I'm not inflicting them on you!

Dazed_and_C0nfused

What is the normal pension age of the DB pension?

BrilliantButScary

Before you make any decisions about transferring your defined benefits pension, have both yourself and your mum had a benefits check, to see if you are entitled to anything else. 

https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/benefits-calculator/

Vegasjay

@Dazed_and_C0nfused - I hope you are well. Thank you for your message. The normal pension age of the DB is September 2028. Thank you for your help. 

Vegasjay

@BrilliantButScary - I hope you are well. Thank you for your advice. Yes we did have a benefits check and mum is receiving Attendance allowance as well as her state pension. I’m getting the carers allowance for looking after mum as that’s all I’m entitled to. Thank you for your help.

Vegasjay

@Marcon. I hope you are well. Thank you for your comments and advice. I’ve read the thread you posted as well as your post of 28th September 2024 that you recommended and that’s really helped. Thank you for that. So far I’ve just had the abridged advice report from Pension Works and the follow up phone call and the financial advisor listened to my reasons for why I needed to transfer my pension. He then spoke to his compliance team and came back to me by email and said that they still do not recommend the transfer. I’ve written back with my reasons and have asked If I can be an insistent client. So I’m waiting to hear back on this. They charge £2995 for the full advice and I need to pay this regardless if they still think it’s not in my interest to transfer. I’m presuming that if they do the transfer for me they will recommend a pension scheme to transfer into ?. Do I have any say in this ?.

After reading your comments I think I now understand the process better ( apologies as I don’t have any knowledge or experience with pensions ) so basically:

1. As long as I get the advice from the pension firm or IFA I don’t need to follow that advice ?. Does the advice have to be full advice ?. I’ve received forms from Aptia and there is a form on there which the pension firm / IFA have to fill in that I’ve received the advice and I have to submit that. Does the advice have to be positive in that they recommend a transfer or can I still insist or request Aptia to do the transfer if they say it’s not in my best interests ?. I saw your comment about the section 48 certificate so I’m presuming this is what the pension firm / IFA will give me when they give the advice to give to Aptia ?.
2. Thank you for the advice on Stakeholder pensions too. I had a look into this and I can see that Aviva and Standard Life offer this pension. Do you have any others you can recommend or know of ?. So the idea would be to transfer my DB pension into this and then use this to draw out of or take lump sums as when I need or take the whole lump sum ?. Am I right that I can open up one of these with £16 /20 and then just put in whatever I can whenever I want ?. 

Sorry for all the questions. Thank you for your help it’s much appreciated. I’ll wait to see what Pension Works come back. I’ve found another 2/3 defined benefit specialists ( Grove, Square Mile, Pension Help and I think Royal London ) as back up. They all charge fees for the advice ( £3000-4000 ) and Grove and Square Mile accept Insistent clients as well. Thanks again for any advice help you are able to give. 

Marcon

Why do you want to be an insistent client? That will increase the workload and risk for the adviser, and either of those - never mind both - could normally be expected to increase the costs you will have to pay.

There's a perfectly viable and simple alternative, as the thread to which I linked above explains.

xylophone

As long as I get the advice from the pension firm or IFA I don’t need to follow that advice ?

You need advice from a suitably qualified person. 

https://www.handbook.fca.org.uk/handbook/glossary/G856.html

 Does the advice have to be full advice ?

Yes

You might consider opening a stakeholder pension before obtaining advice from a suitably qualified adviser (pension transfer specialist).


For PTS you might also try

https://adviserbook.co.uk/

Tick "confirmed independent",  "pension transfer specialist"  and other options when the menu comes up

Vegasjay

@Marcon I hope you are well. Thank you for your message and comments and advice. I totally get it now. Open up a stakeholder pension and then once I’ve done that find a Pension Transfer specialist / IFA for full advice. And once I’ve received this full advice then go back to Aptia to ask them to arrange the transfer to my stakeholder pension. I’ve just been assuming that I could only arrange the transfer If I only received a recommendation to transfer the pension upto now. I’ve read the link and comments again to the link you gave me too. You are right this is a more simpler viable alternative. Thank you for your help. 

Vegasjay

@xylophone. I hope you are well. Thank you for your help and advice. And thank you for the links for the handbook and the adviserbook. That’s really helpful. I’ll have a look at both. And as per my message to Marcon I’ll open up the stakeholder pension first priority before taking the full advice from the PTS. Thanks.