Thoughts about my pension please..?

i think the key should be what are your aims, and then how best to achieve them, rather than about having control for its own sake. for instance, if your aim is to have a steady income for life, and the DB pension gives that, why transfer out and then invest a large pension with an aim of achieving a steady income for life, which you had to start with?

there are possible reasons to transfer out. you have to work out whether they apply to you.

i think a lot of the possible reasons fall under the following categories:

1) aiming to achieve a higher income for life than you'd get from the DB pension. transfer values for DB pensions have become so high recently that this is often realistic. however, it does come with some risk. i.e. the odds may favour achieving a higher income but there is also the risk of ending up with a lower one.

i would not worry too much about the debate about the 4% rule here. (which comes down to: is that too optimistic, and should it be 3% or some other figure instead?) because in practice, what anybody sensible will use is flexible drawdown rate.

people who are taking 4% or 5% (or perhaps even 6%) should be OK if they understand that that is a variable rate, and if investments are doing badly (especially in the first few years of retirement, which is when investment losses can hurt you the most), they will have to cut back. but if they think the 4% or 5% is a certainty, they may have a rude awakening.

drawdown is not usually based on pure yield, i.e. if you're drawing 4%, you don't necessarily use investments which pay 4% annual yield. more typically, the yield would be lower, and you'd sell down some capital to raise the rest of the 4% . (in the long run, you expect some capital gains - though some years will be up, others down - so this can be sustainable.) the problem with going for 4% yield is that most investments don't have that high a yield, so you'd end up not being very well diversified. e.g. the FTSE100 is close to 4% yield, but it's not very well diversified by itself, and the major indexes in most other countries/world regions yield less. and bonds - the steadier component of the portfolio - yield less (unless they are the riskier bonds).

2) wanting to spend a much larger amount in the early years of retirement (e.g. on travel), but less in later years. many retired people's spending does follow this kind of pattern. there's no point not having access to enough cash to do more active things you want to do in early retirement, but then having more income than you want to spend when you're in your 80s.

however, you can start by using any accessible capital outside of pensions for extra spending in early retirement, and then consider taking the maximum lump sum from the DB scheme for the same purpose. it's only if that doesn't give you access to enough capital early on (and leaves you an unnecessarily high income later on), that it might be a reason to transfer out of the DB pension.

(incidentally, presumably you will also get a state pension from age 67. this should be factored in. it gives you more income in (slightly) later retirement, possibly not when it's most useful to you.)

3) bequest motive. if you take the DB pension, it's gone when you die (except for spousal pension, where applicable). but if you transfer out, you have a pension pot, which (provided you don't spend it all), can be passed on to somebody else (or to charities). you can leave an "expression of wishes" with the pension provider, to say where you want it to go (pensions are not covered by your will, because they don't count as personal property).

now, you say you don't have dependents, so you don't feel obliged to leave anything to anybody. but do you want to (if possible, after providing for your own retirement properly)? that's a possible motivation for transferring out.

OTOH, if your aim is to spend the lot, then in the long run, the only good way to do that without risking penury is to turn your pension into an annuity. one way to do that is to stick with the DB pension.

however, another way is to transfer out, and initially use investments and draw a variable income via drawdown, but to use the remaining pot to buy an annuity later on. if you wait till you're somewhere in your 70s, then annuity rates will be higher because of your higher age (hence lower life expectancy). but then, would a higher reliable income be so worthwhile, if you don't get it until a much higher age? (that's for you to say, not me )

kidmugsy's idea of transferring out, and then using part of the pot to buy an index-linked annuity is also worth considering. perhaps you could buy a large enough annuity to give you a decent income in later retirement - especially when considering that you will also have state pension then - and then you are freer to do whatever you like with the rest. whether that is big spending in early retirement. or trying to leave as large an amount left over as possible when you die, to be a nice surprise for whichever friend or charity you choose.

i'm not sure what i'd do in your situation. i don't have any DB pension. i will probably just have state pension + the investments that i manage myself (part in a SIPP, but more in ISA and taxable account). while i'm happy managing my investments, i may be less happy doing that when i'm a lot older, and i am thinking that i might want a larger fully guaranteed pension than just the state pension. so i am thinking that i may eventually use much of my SIPP to buy an annuity, though perhaps not till i'm 70 or more.