Pension advice / suggestions please

Retired_I.F.A.

Resident Muppet... "If the rate is high (as it often is)"

And when was the last time you saw a TVA Ed ? if you have ever seen one at all I'll eat my cap Your beloved H & L charge £500 for one. IFA's tell me nowadays the yield required to match is typically 6% nett of charges or 7% gross and from talking in this forum to a pension scheme administrative staff member transfer values are much closer to the benefits true worth nowadays too.

dunstonh

Also remember that MiFID rules from 1st Nov last year also impact on the decision because the investment experience and IQ of the client need to be considered.

Retired_I.F.A.

Well if Ed's got a preserved pension that rules out any chance of getting it into her SIPP

floss2

EdInvestor wrote: »

If this deferred pension went up by 5% annually to retirement (say 35 years) it would be worth 3,251 p.a. when you come to take it.Does it have a spouse pension attached, if so how much? Is it indexed for inflation after you retire, at what rate? How much is the transfer value being offered?

If you tell us the answers, we can give a rough idea of what size of pension pot would be needed after 35 years to replace the pension.

Then it's a question of working out the rate at which the transfer value needs to grow in order to get to that size.If the rate is high (as it often is) you would need to use high risk investments to achieve the same result.This higher risk brings the possibility of loss. This is why the size of the transer value can be important.

Ok, I didn't give figures before as I wasn't sure they would be needed but:

Age 44, DWP retirement age 66
a). Transfer value £3,8861.61, Deferred pension £556.71 pa, No spousal pension
b). Transfer value £5,081.11, Projected fund of £7,370, projected pension of £245 p.a. (SERPS/S2P 1991-2000)
c). Current N/U fund value £2,157.74, current cont £120 + tax per month
d). Local Govt scheme value £1948.75, current cont £81.78 + emp per month
e). Have full NI contribution history for state pension

Poor provision is a result of being married SAHM or working part time until 1999. Divorce was finalised before pension sharing was required, no settlement was paid (legal aid would have swallowed it for repayment of fees)

Thanks,
Floss

Retired_I.F.A.

A. is a retained benefit commonly called a frozen pension because they were not increased each year till retirement at one time.

B & C are personal pensions probably. These are money purchase plans meaning the money/fund still invested till, will at retirement be used to buy an annuity or drawdown an income.

d is a final salary scheme. (if you left you'd get a deferred pension such as A )


Go see another IFA (the first one couldn't be bothered to even spend 5 mins with you by the looks of it.) and look into transferring the 7k in b and c to more modern personal pensions with lower charges and far bigger fund investment choices. Even if he took full commission instead of a fee it'd most likely be to your advantage taking that commission into account.(which would be abound £350) and if not it'd cost you nothing.

With The preserved pension (a) it is going to be very difficult to find an IFA willing to sign off such a transfer as the chances of him being fined/struck off should you ever pursue a mis selling claim in the future far outweighs his earnings for doing it in the first place even if transferring is the best move as no matter how well he documents the reasons why the regulators can and do change the goalposts. So until the goalposts are set properly just leave it preserved.

Continue as a member of your current pension scheme and look to transferring out of that only if the above goalposts are set properly and the law is changed giving those who do not opt into joining the scheme equal pay with those that do. (The European courts ruled years ago pensions are a part of pay but we still discriminate in the UK)

floss2

Thank you Retired I.F.A.

C is my current personal pension scheme with NU, which I will continue with until I have seen an IFA.

I do not wish to transfer out of the Local Government final salary scheme, mainly because of the employers contributions & the benefits attached (3 x salary lump sum etc)

Thanks for all the suggestions

Dithering_Dad

Retired_I.F.A. wrote: »

Well if Ed's got a preserved pension that rules out any chance of getting it into her SIPP

I'd be very interested to know what EDInvestor's actual pension provisions are. She always seems to advise people to ditch their personal pensions and use ISAs instead (regardless of circumstances). She was also promoting the use of BTL properties as part of a pension portfolio.

On both accounts I have asked the question "Are you investing in this way ED, or is it just something you advise someone else to do?". No reply was forthcoming.

I always judge the integrity of any adviser on whether they follow their own advice. Hence I'd find it very interesting to see if ED has all her retirement savings invested in ISAs and BTLs. If not, then I just don't see how she can credibly advise others to do so?

Retired_I.F.A.

I do not wish to transfer out of the Local Government final salary scheme, mainly because of the employers contributions & the benefits attached (3 x salary lump sum etc)

Rightly so but note the TILL and the IF I added. Here's a damn good reason why if you get equal pay offered a personal pension can blow a final salary scheme out the water..
http://forums.moneysavingexpert.com/showthread.html?t=925017

EdInvestor

Dithering_Dad wrote: »

I always judge the integrity of any adviser on whether they follow their own advice. Hence I'd find it very interesting to see if ED has all her retirement savings invested in ISAs and BTLs. If not, then I just don't see how she can credibly advise others to do so?

Since you ask, I have the full Monty, for my sins.One final salary preserved pension, one SIPP (formerly a section 32 buyout bond,formerly a final salary pension), one protected rights pension, 2 state pensions, a stocks and shares ISA and a BTL. I should say however that the pensions were all compulsory - from back in the days when it was a condition of employment to join the pension scheme.

I do regret the massive amount of time I have had to spend in learning the ins and outs of the numerous and constantly changing regulations which control the pension systems (of which there are several) in order to make sure my retirement savings work in my own interests, rather than somebody else's. Wouldn't wish that on anyone.

In the past 20 years I have chosen to use ISAs and invest direct. Along with letting property, this was a doddle by comparison.

Dithering_Dad

EdInvestor wrote: »

Since you ask, I have the full Monty. One final salary preserved pension, one SIPP (formerly a section 32 buyout bond,formerly a final salary pension), one protected rights pension, 2 state pensions, a stocks and shares ISA and a BTL.

I'd have to say that I think this would be the ideal, no 'all eggs in one basket' issues here. These days it's difficult to acquire a final salary pension, but the remainder of your portfolio would be achieveable by most people and preferable in my opinion. We all will have the 2 state pensions (unless of course self employed for whole of working life), anyone who has contracted out would have the protected rights - though current thinking is to stay contracted in for better value. The SIPP containing tax free pension contributions (with hopefully any prot rights once these are allowed), S&S ISA holding emergency savings or pension savings if no emergencies occur during working life and a BTL if you want to invest money into an inflexible asset. Perfect balance.

I dare say that your OH also has a similar portfolio?

I must admit that if I had the security of a Final Salary pension, Protected rights in a Personal Pension, and a Self Invested Personal Pension then I too would then be confident enough to put the remaining 20 years of my working capital into just S&S ISAs. I'm just not so sure that I'd be able to advise other people who didn't have the security of all those pensions to do similar though.

Perhaps you should put a caveat along the lines of "I must point out that I personally have three different personal pension products in conjunction with my S&S ISA savings, so while I am advising you to put all your retirement money into S&S ISAs, rest assured that I haven't got all my eggs in one basket" in your signature?