Interesting report about retirement lifestyle (Quilter Retirement Lifestyle Report 2025)

GazzaBloom

All very interesting but having recently retired, it feels fairly irrelevant to me. All I'm really interested in is what I need to spend in retirement and how I fund it, I don’t really care where I sit in comparison to others and don't really care what others spend. I felt the same about these reports pre-retirement and found it far more valuable focussing on my personal retirement planning than worrying about what was going on over the garden fence.

ewaste

I'm pretty sure it's saying that of those who took part in the survey and of those who had previously transferred DB to DC, 35% had done so for potential inheritance tax reasons. That makes perfect sense as it's often a reason for people to transfer out of a DB scheme.  

cfw1994

ewaste said:

I'm pretty sure it's saying that of those who took part in the survey and of those who had previously transferred DB to DC, 35% had done so for potential inheritance tax reasons. That makes perfect sense as it's often a reason for people to transfer out of a DB scheme.  

Not for too much longer when the changes to move DC pots into IHT calculations happen 🙄

JoeCrystal

cfw1994 said:

ewaste said:

I'm pretty sure it's saying that of those who took part in the survey and of those who had previously transferred DB to DC, 35% had done so for potential inheritance tax reasons. That makes perfect sense as it's often a reason for people to transfer out of a DB scheme.  

Not for too much longer when the changes to move DC pots into IHT calculations happen 🙄

I wonder how many of them would have "Buyer's Remorse" about it already. 

Albermarle

ewaste said:

I'm pretty sure it's saying that of those who took part in the survey and of those who had previously transferred DB to DC, 35% had done so for potential inheritance tax reasons. That makes perfect sense as it's often a reason for people to transfer out of a DB scheme.  

Well it says this>

Our research found that a little over a third (35%) of retirees chose to transfer out their defined benefit pension into a defined contribution pot in retirement. Of this group, 40% did so because they wanted to pass it on to family in a tax-efficient way.

WYSPECIAL

Albermarle said:

ewaste said:

I'm pretty sure it's saying that of those who took part in the survey and of those who had previously transferred DB to DC, 35% had done so for potential inheritance tax reasons. That makes perfect sense as it's often a reason for people to transfer out of a DB scheme.  

Well it says this>

Our research found that a little over a third (35%) of retirees chose to transfer out their defined benefit pension into a defined contribution pot in retirement. Of this group, 40% did so because they wanted to pass it on to family in a tax-efficient way.

It's not clear how many of the sample size actually had a DB pension at some stage that they could have transferred out of as it would seem unlikely that all would have.

It looks as if the sample group they surveyed was selected from a very small pool rather than at random.

SVaz

For the beneficiaries of a DC pot after 2027,    having 60% of something is far better than getting a big fat zero,  which is what people who aren’t spouses or dependent children would get from a DB.  Even spouses generally only get a 50% . 

zagfles

Grumpy_chap said:

JoeCrystal said:

"One underappreciated aspect of the change to inheritance tax is the extent to which it has rendered previous financial plans redundant. Our research found that a little over a third (35%) of retirees chose to transfer out their defined benefit pension into a defined contribution pot in retirement. Of this group, 40% did so because they wanted to pass it on to family in a tax-efficient way. Many of these people will now find they have to radically alter their plans to ensure their families are not in line for large tax bills when they die."

That does not make sense to me.

An individual with a DB pension scheme does not have any value that can be left to dependents.  (Sometimes spousal pension.)
An individual who transfers that DB value to DC for the purpose of being able to leave the value to their family can still do so. 
The Estate (not the family) may incur a tax bill on that pension value. 
The family still get 60% of the pension value rather than the nothing that would have been the case had the pension remained in DB scheme.

Yes but they've given up the advantages and security of a DB pension for a potentially smaller benefit for their family. 

zagfles

Albermarle said:

ewaste said:

I'm pretty sure it's saying that of those who took part in the survey and of those who had previously transferred DB to DC, 35% had done so for potential inheritance tax reasons. That makes perfect sense as it's often a reason for people to transfer out of a DB scheme.  

Well it says this>

Our research found that a little over a third (35%) of retirees chose to transfer out their defined benefit pension into a defined contribution pot in retirement. Of this group, 40% did so because they wanted to pass it on to family in a tax-efficient way.

It doesn't surprise me. A lot of people look at their pension statement and see a smallish annual amount say £15k and then see a massive transfer amount say £500k and they would rather have half a million up than £15k a year. 

It's like people in schemes like the LGPS who take lump sums at a ridiculous commutation rate of 12:1, people see a large lump sum as more valuable than a guaranteed index linked income. 

Silvertabby

zagfles said:

Albermarle said:

ewaste said:

I'm pretty sure it's saying that of those who took part in the survey and of those who had previously transferred DB to DC, 35% had done so for potential inheritance tax reasons. That makes perfect sense as it's often a reason for people to transfer out of a DB scheme.  

Well it says this>

Our research found that a little over a third (35%) of retirees chose to transfer out their defined benefit pension into a defined contribution pot in retirement. Of this group, 40% did so because they wanted to pass it on to family in a tax-efficient way.

It doesn't surprise me. A lot of people look at their pension statement and see a smallish annual amount say £15k and then see a massive transfer amount say £500k and they would rather have half a million up than £15k a year. 

It's like people in schemes like the LGPS who take lump sums at a ridiculous commutation rate of 12:1, people see a large lump sum as more valuable than a guaranteed index linked income. 

Unless things have changed since I retired over 90% of LGPS pensioners take the maximum tax free lump sum.  And many still do transfer out to DC schemes, despite the low transfer factors (set by GAD) used.