Annuity or take the CETV

Albermarle

SVaz said:

I’ve never seen a poster come back on here who went ahead with advice and had a positive recommendation for transfer,  it would have been ‘big news’ with people wanting to know the specifics of how it came to be approved. 

I might have missed one but it would have been signposted for anyone who came asking afterwards, something like that wouldn’t have just disappeared from the board. 

I do remember on another forum that someone mentioned a firm by name who was supposedly doing their transfer but they vanished into the ether like so many others. 

Around 2016 to 2018, my old employer was keen to get people to transfer out of their DB scheme, ( which had been closed for a good 10 years earlier) They offered the services of a financial advice firm for free, and the CETV's on offer were attractive. I did not go for it, but I know a few ex colleagues who did and transferred out, with both negative and positive recommendations. Some DC providers were still accepting transfers with negative recommendations at that time. 
I think normally to get a positive recommendation you have to show you can almost survive OK without the DB pension/transferred pot. So if you are lucky enough to have two DB pensions, it will be easier to transfer one of them, especially when the CETVs were high.

DairyQueen

Albermarle said:

SVaz said:

I’ve never seen a poster come back on here who went ahead with advice and had a positive recommendation for transfer,  it would have been ‘big news’ with people wanting to know the specifics of how it came to be approved. 

I might have missed one but it would have been signposted for anyone who came asking afterwards, something like that wouldn’t have just disappeared from the board. 

I do remember on another forum that someone mentioned a firm by name who was supposedly doing their transfer but they vanished into the ether like so many others. 

Around 2016 to 2018, my old employer was keen to get people to transfer out of their DB scheme, ( which had been closed for a good 10 years earlier) They offered the services of a financial advice firm for free, and the CETV's on offer were attractive. I did not go for it, but I know a few ex colleagues who did and transferred out, with both negative and positive recommendations. Some DC providers were still accepting transfers with negative recommendations at that time. 
I think normally to get a positive recommendation you have to show you can almost survive OK without the DB pension/transferred pot. So if you are lucky enough to have two DB pensions, it will be easier to transfer one of them, especially when the CETVs were high.

In 2018 I also transferred from a DB in similar circumstances to this. I had a multiple of x 32 and, since then, markets have been kind. I have more than doubled my fund since then. Indeed, OH and I have increased our pot by more than 60% in three years. Lucky timing.

RogerPensionGuy

SVaz said:

I’ve never seen a poster come back on here who went ahead with advice and had a positive recommendation for transfer,  it would have been ‘big news’ with people wanting to know the specifics of how it came to be approved. 

I might have missed one but it would have been signposted for anyone who came asking afterwards, something like that wouldn’t have just disappeared from the board. 

I do remember on another forum that someone mentioned a firm by name who was supposedly doing their transfer but they vanished into the ether like so many others. 

There is probably many many 1000s of people that vented DBs in to sensible DC SIPPs and died a bit later possibly left a nice inheritance and possibly zero tax, certainly a nice ploy there however the IHT net is clipping this route bug style. 

dunstonh

Silvertabby said:

dunstonh said:

There are still transfers going on that are advised.   We are just back in the ballpark where around 1 in 10 is suitable to transfer now that CETVs have halved.    

Those with a very limited life expectancy, who don't have any eligible dependants who would qualify for survivor's pensions ?

That would be the sort of thing.  Just like it used to be before the credit crunch.

Albermarle

DairyQueen said:

Albermarle said:

SVaz said:

I’ve never seen a poster come back on here who went ahead with advice and had a positive recommendation for transfer,  it would have been ‘big news’ with people wanting to know the specifics of how it came to be approved. 

I might have missed one but it would have been signposted for anyone who came asking afterwards, something like that wouldn’t have just disappeared from the board. 

I do remember on another forum that someone mentioned a firm by name who was supposedly doing their transfer but they vanished into the ether like so many others. 

Around 2016 to 2018, my old employer was keen to get people to transfer out of their DB scheme, ( which had been closed for a good 10 years earlier) They offered the services of a financial advice firm for free, and the CETV's on offer were attractive. I did not go for it, but I know a few ex colleagues who did and transferred out, with both negative and positive recommendations. Some DC providers were still accepting transfers with negative recommendations at that time. 
I think normally to get a positive recommendation you have to show you can almost survive OK without the DB pension/transferred pot. So if you are lucky enough to have two DB pensions, it will be easier to transfer one of them, especially when the CETVs were high.

In 2018 I also transferred from a DB in similar circumstances to this. I had a multiple of x 32 and, since then, markets have been kind. I have more than doubled my fund since then. Indeed, OH and I have increased our pot by more than 60% in three years. Lucky timing.

I already had a decent DC pot, so preferred to keep the balance rather than all eggs in one basket.
Like you though , I would probably have been better off taking the money.
However the upcoming IHT change will have reduced that by 40%, and would have pushed total assets over the limit where all the RNRB would be lost.
Also I did not take the DB lump sum and with the help of a Transitional Tax free Certificate, I can still take the full £268K tax free from the DC pensions. IF they grow big enough and IF that £268K does not get reduced.
So swings and roundabouts to some extent.

QrizB

Like others in this thread, if I'd known in 2020 that annuity prices would rise to the current heights by 2025, I could've taken my CETV and then, today, purchased a pension roughly 2x the size of my deferred DB. And that's ignoring any growth in the DC pot from 2020 to 2025.

In 2020 however, none of this was inevitable. I'm happy with my choices.

Albermarle

QrizB said:

Like others in this thread, if I'd known in 2020 that annuity prices would rise to the current heights by 2025, I could've taken my CETV and then, today, purchased a pension roughly 2x the size of my deferred DB. And that's ignoring any growth in the DC pot from 2020 to 2025.

In 2020 however, none of this was inevitable. I'm happy with my choices.

I have just done an approx calculation based on my figures.

I was offered approx £400K for a £12.5K pension, ( part RPI max 5%, part max 3% , 66% spouse)

According to HL tables a joint life 3 % escalation, pays around 4.5%, so £400K would get around £18k pa.

So some pot growth would have been necessary to get to double. Probably with all eggs in one basket I guess I would have had a more cautious investment strategy and possibly got more burnt by the bonds collapse, but maybe would have got 25/30% in 7 years, so that could have got me close to double.
Although would have been a much more stressful few years, with everything in a DC pot rather than a mix.

Cobbler_tone

QrizB said:

Like others in this thread, if I'd known in 2020 that annuity prices would rise to the current heights by 2025, I could've taken my CETV and then, today, purchased a pension roughly 2x the size of my deferred DB. And that's ignoring any growth in the DC pot from 2020 to 2025.

"If my grandmother had wheels, she would have been a bike"

I know of several people who took £700k plus back then. Employees in their late 50's, earning £30k a year at the time. No idea how they are doing now, although know a couple bought a few properties up north.

IMO you can't beat a solid DB, not forgetting the comparison is apples and pears with the events being 5 years apart....with the DB quietly doing its thing.

We could all be a lot, lot wealthier with hindsight.  

SVaz

I know a few ex-forces who transferred their military pensions when it was possible to do so and spent the lot when they later cashed them in. 

Stupid is as stupid does I suppose. 

I don’t know what multiplier was used for the cetv but I doubt it was very high. 

jimjames

dunstonh said:

In order to change this DB to a CETV I must get FA to advise whether this is a good idea or not, so I will speak to one. I'm being quoted £2K plus for this service.

2k seems very low for DB transfer advice.  Unless that is just the first stage of the process.  

That was my thought, I'd been quoted similar amount for the first stage when I investigated a couple of years ago. Full advice would have been much more but the initial (abridged??) version was around that amount but wouldn't be sufficient to actually do a transfer.