Defined Benefit Pension

confusedpension

Hi, I have a Defined Benefit Pension which is less than £30k. I wanted to transfer this across to a Defined Contribution Scheme, but so far I cannot find a provider who is will to take it. This means I am going to have to take 25% tax free, which is just under £6k, an the remainder as an annuity - works out about £80 per month. Just feeling annoyed because I don't have any other pension & would have preferred to transfer it to a drawdown scheme which would have given me more flexibility. Why am I unable to transfer it? Thanks

MallyGirl

If you have a transfer value under £30k and no safeguarded benefits then most providers should accept it. What are you asking them that gets the negative response?

Keep_pedalling

Why do you think you will be better off transferring it out? The £80 pm is not an annuity and will almost certainly have some form of index linking to it. 

GunJack

Doesn't sound like a DB from the way you describe having to take it...

DRS1

Are you sure your existing scheme is defined benefit?  When you talk about 25% tax free and buying an annuity with the rest that sounds like a defined contribution scheme.

Maybe the receiving schemes hear defined benefit and just say No.

Marcon

confusedpension said:

Hi, I have a Defined Benefit Pension which is less than £30k. I wanted to transfer this across to a Defined Contribution Scheme, but so far I cannot find a provider who is will to take it. This means I am going to have to take 25% tax free, which is just under £6k, a the remainder as an annuity - works out about £80 per month. Just feeling annoyed because I don't have any other pension & would have preferred to transfer it to a drawdown scheme which would have given me more flexibility. Why am I unable to transfer it? Thanks

Sounds like a DB scheme, just OP using a spot of DC terminology.

It's entirely up to providers what they will or won't accept - with one exception: stakeholder pensions. Set up one of those (still a couple open to new direct customer business) and use that.

Alternatively, if you have no other (non-state) pension provision, you could ask the scheme about 'total commutation on the grounds of triviality' if you have reached the age of at least 55.

sheslookinhot

The biggest issue here is “I don’t have any other pension”. 

In that case you shouldn’t touch the other “pension” but take immediate steps to start a pension which will support you post working life.

confusedpension

Hi, have attached my question & FA response.

Marcon

The transfer value is under £30K so advice isn't mandatory, so that's irrelevant.

Marcon

sheslookinhot said:

The biggest issue here is “I don’t have any other pension”. 

In that case you shouldn’t touch the other “pension” but take immediate steps to start a pension which will support you post working life.

...depending on how that interacts with state benefits, especially if OP's state pension is going to less than full (meaning they may be eligible for Pension Credit or whatever is around at the time).

confusedpension

Thanks all