Pensions Planning

AlanP_2

Stepping back a bit and looking at this logically:

Why do you want to take it all as cash at Age 55?

What are you trying to achieve?

How does this Defined Benefit pension fit in to your overall approach to retirement planning and how you will fund the next 30/40 years?

BTW - The requirement to take independent advice before transferring out of a DB scheme is enshrined in law, it is not just a whim someone dreamt up.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82021876#Comment_82021876

A similar thread started today

Drawdown Pensions — MoneySavingExpert Forum

QrizB

https://forums.moneysavingexpert.com/discussion/comment/82022859#Comment_82022859

And one from a couple of days ago:

https://forums.moneysavingexpert.com/discussion/6670686/financial-adviser-for-a-db-transfer

Silvertabby

Unless I'm missing something, the way I read it is that RM DB pensions accrued before 2012 are classed as public sector unfunded and so can only be transferred to another DB scheme. Realistically, this now means that a transfer would be limited to the Civil Service, NHS, LGPS, etc.

If I'm right then a transfer out is off the cards. As is taking the whole amount from RM in one lump sum, as the notional value of this pension alone (20 X annual pension plus 1 X any automatic lump sum) exceeds the total trivial commutation limit of £30K.

OP - The first thing you need to do is to check with your pension administrators if a transfer out to a non DB scheme is even possible. If not, then your only option will be to take the pension as offered by RM.

Marcon

OP - The first thing you need to do is to check with your pension administrators if a transfer out to a non DB scheme is even possible. If not, then your only option will be to take the pension as offered by RM.

The voice of sanity - start with the facts!

A transfer to a non-defined benefit scheme isn't possible for benefits built up prior to 1 April 2012. See https://www.royalmailsps.co.uk/im-not-receiving-my-pension-yet/i-want-to-transfer-my-benefits/how-do-i-make-a-transfer

Marcon

https://forums.moneysavingexpert.com/discussion/comment/82022376#Comment_82022376

OP, if you want to see a good example of exactly why this transaction is so risky for advisers, have a look at

https://forums.moneysavingexpert.com/discussion/6623518/transfer-advice-complaint-do-i-have-a-leg-to-stand-on-here

You'll then get a much better understanding of exactly why there are so few advisers (and even fewer PI insurers) willing to take on the risks of advising on DB transfers.

BikingBud

https://forums.moneysavingexpert.com/discussion/comment/82025114#Comment_82025114

Yes, considering small amounts in isolation can be detrimental to sanity but nibble away at the obligatory bits and see what's left for fun.

Yorkie1

https://forums.moneysavingexpert.com/discussion/comment/82025114#Comment_82025114

I'd check your current NI contributions, if you're close to meeting the 35 years max,

As the OP is nearing retirement age, the 35 years max will not apply to them. Each person born before about 2000 will have a different maximum number of years, depending on their history.

Silvertabby

https://forums.moneysavingexpert.com/discussion/comment/82025241#Comment_82025241

Anything between 28 years and 50 years.

michael1234

https://forums.moneysavingexpert.com/discussion/comment/82025106#Comment_82025106

OP, I'm sure you have better things to do that read dozens of pages of my old threads but I can assure you that this thread is NOT about the risk of moving a DB pension into a DC.

I'm a very similar age to you and I have gone through the process. If you waste your time reading that thread you'll see I was incredibly unlucky with the markets at the point of transfer. My main point was to focus on the fact that these people who charge thousands of pounds for old rope do not even get the very basics right. These people have had drummed into them that "thou must not recommend a move from DB to DC" and seem to have forgotten about the fact they also should provide basic advice.

My case is ongoing and I will win because 100% of my advice was about the specific risk of DB to DC. Nothing about any other risk. In my case that was selling a few hundred grand's worth of shares with a view to buying them back a few weeks later. Yes any idiot should know that but that is intrinsic and critical to the transfer process and someone who hoovers up thousands for "advice" should include it as part of their advice. It should be front and centre "you will be required to sell up all and buy back in 2 months later - BIG RISK". But they don't see it as its not their money and they simply follow FCA rules. That has been shown time and time again.

As for the DB to DC transfer, I'm very happy I made the move. Your mileage may vary.