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DB pension transfer......update

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  • jimi_manjimi_man Forumite
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    So I posted recently whilst away about a potential DB transfer to SJP and was advised to add some specific details so here we go.
    DB scheme was closed by my company after 29 years of contributions. I then started a DC pot.
    I’m 53 with a view to retire at 60.
    My reason for considering a transfer out is I want more flexibility and the option to leave the children some funds after we pass away.
    My wife is 8 years younger than me and has no pension to mention so the transfer out would also ensure her financial position should I pass away. She’d only get 2/3rds of my DB if we left it in and the kids get nothing.
    So then the numbers, CETV is £1.2m, DB pension is offering £36k annual pension or £180k lump and £27k. My DC pot will be worth c.£175k at 60 assuming very modest annual growth. There should also be c. £100k cash/shares at 60 plus full state pension later on in 60’s.
    So my question is, general thoughts about SJP, fees, lock ins and anything else given some things I’ve been reading about them recently.
    Appreciate thoughts on the above.
    Thanks, DG


    Just reading this post makes me want to scream 'for god's sake don't do it'!

    I'm assuming you're in good health. You have other savings and your wife has no pension provision of her own (and is 8 years younger so is likely to benefit from the 2/3 spouse pension). If someone was to design the ideal pension to fit your specific circumstances, I reckon it would look remarkably like what you have now. Hassle and worry free, inflation proofed, decent spousal provision. To my mind you can go out and enjoy retirement and not have to worry about market fluctuations, fees, choice of products.

    I know there are a lot of clever people on here who will quote various figures and different methods of drawdown which is all interesting and useful information. Also that 1.2 Million looks attractive (it's obviously designed to) but to my mind it's nowhere near enough.

    You have a good retirement provision planned. Why mess around with it purely in the pursuit of a few extra pounds and then suffer all the stress and worry of wondering how your investments are doing for the rest of your life? Just enjoy the retirement you've saved for.

    People traded on this premise in the 80's and then paid for it dearly. And now the same thing is happening again. Whether selling DB pensions will go sour... well, we'll just have to wait and see. But I wouldn't consider what you're doing, I think it's foolish.
  • LintonLinton Forumite
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    jimi_man wrote: »
    Just reading this post makes me want to scream 'for god's sake don't do it'!

    I'm assuming you're in good health. You have other savings and your wife has no pension provision of her own (and is 8 years younger so is likely to benefit from the 2/3 spouse pension). If someone was to design the ideal pension to fit your specific circumstances, I reckon it would look remarkably like what you have now. Hassle and worry free, inflation proofed, decent spousal provision. To my mind you can go out and enjoy retirement and not have to worry about market fluctuations, fees, choice of products.

    I know there are a lot of clever people on here who will quote various figures and different methods of drawdown which is all interesting and useful information. Also that 1.2 Million looks attractive (it's obviously designed to) but to my mind it's nowhere near enough.

    You have a good retirement provision planned. Why mess around with it purely in the pursuit of a few extra pounds and then suffer all the stress and worry of wondering how your investments are doing for the rest of your life? Just enjoy the retirement you've saved for.

    People traded on this premise in the 80's and then paid for it dearly. And now the same thing is happening again. Whether selling DB pensions will go sour... well, we'll just have to wait and see. But I wouldn't consider what you're doing, I think it's foolish.


    I must agree completely. As regards your wish to benefit your children: How old are they now? Your life expectancy is perhaps another 35 years, your wife's perhaps 45 years. Surely the children will have sorted out their lives by then and wont need your money. From your ages they could be thinking about retirement themselves. 35-45 years worrying about the next crash is just too much of a sacrifice.
  • jsincjsinc Forumite
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    I wouldn't even consider transferring DB benefits to SJP. But alternatives exist; such as advice from a better IFA.
  • edited 22 August 2019 at 7:43PM
    AlexlandAlexland Forumite
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    edited 22 August 2019 at 7:43PM
    If you want a warm feeling stick with the DB scheme rather than pay high SJP fees creating an LTA problem.

    Would you have any spare lump sum or income from the DB to gift to your children?

    It might be more useful to them now than later in life after you are gone.

    Alex
  • GunJackGunJack Forumite
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    Alexland wrote: »
    If you want a warm feeling stick with the DB scheme rather than pay high SJP fees creating an LTA problem.

    Would you have any spare lump sum or income from the DB to gift to your children?

    It might be more useful to them now than later in life after you are gone.

    Alex

    agreed, and if taking the £180k LS then gifting to kids becomes ridiculously easy.....
    ......Gettin' There, Wherever There is......

    I have a dodgy "i" key, so ignore spelling errors due to "i" issues, ...I blame Apple :D
  • Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.
  • jsincjsinc Forumite
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    Alexland wrote: »
    If you want a warm feeling stick with the DB scheme rather than pay high SJP fees creating an LTA problem.

    Would you have any spare lump sum or income from the DB to gift to your children?

    It might be more useful to them now than later in life after you are gone.
    Alex
    Don't think I'd transfer at all on that multiple, and the £pa is above my projected retirement needs. All these DB transfers, and SJP prevalence, are a little worrying imo. But I'm not the OP and circumstances differ.
  • BrynsamBrynsam Forumite
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    I’m happy with the DB if it was just me but with my wife’s poor pension, her being much younger and thinking of the kids these elements are steering my thoughts.

    Ever thought of taking out life insurance?
  • AlbermarleAlbermarle Forumite
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    Don't think I'd transfer at all on that multiple
    If you assume that the DB pension of £36K is what it will pay at 60, then if he took it early ( say for sake of argument at 55) it would be significantly less, which gives a rather more striking multiple.
    According to expert opinion on another thread this is strictly how the multiple should be calculated .

    On the other side another poster was right to point out that some of the gloss could come off , due to incurring LTA penalties . especially as he already has a DC pot .
  • Mick70Mick70 Forumite
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    I have a similar dilemma myself (have posted mine on here) , however my DB is £26k and spouse £15k, if my DB was £36k and spouse 2/3 and it was rising with rpi I personally would Not transfer , thats a great DB package to have - if you key it into a spreadsheet and increse the 36k by say 2.5% each year i bet over 25 years it outstrips or comes very close to that cetv value anyway .
    Others on here no far more than me , but from what i can see i would stick.
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