Should I Transfer My Final Salary Pension Fund?

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  • jamesd
    jamesd Posts: 26,103 Forumite
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    Taking your time and doing it later if you do it is likely to be best. The gradually falling 5% a year reduction will increase the transfer value. Interest rate increases will decrease it. At the moment it appears that the 5% effect is likely to be bigger. Not something that can be guaranteed, just how it appears at the moment.
  • Dox
    Dox Posts: 3,116 Forumite
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    pensionnovice wrote: »
    Thanks guys for all your posts. There's a lot for me to consider. My instinct tells me that if the decision to transfer or not is borderline and not clear-cut, then I might as well leave things as they are. I've clearly got a lot of thinking to do. Thanks for all your help.


    Regards from david

    Have a read of this thread, especially the posts at the end: https://forums.moneysavingexpert.com/showthread.php?t=5859693
  • atilla
    atilla Posts: 862 Forumite
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    Brynsam wrote: »
    In fairness to the IFA consulted by OP, it sounds as if she was given a transfer value which was out of its guarantee period, so there would have been no merit in charging OP around £600 for a transfer value analysis.

    OP - once you get your new transfer value, send it straight on to the IFA. It is only guaranteed for 3 months and if you don't take a decision on whether or not to transfer out, and the scheme(s) to which you wish to transfer, the value will lapse and you will have to start again with an updated transfer value - which could be a year away.
    The OP mentioned Financial Advissor. NOT an Independent advisor.
    With some of the horror stories coming out about the sharks circling the British Steel pension this may well be important.
  • STEVE_PEACOCK
    STEVE_PEACOCK Posts: 4 Newbie
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    I am in a similar boat with my Final salary pension and also in a dilemma what to do. The financial advisers that are keen on my transferring out are quoting 2 - 3% fees. Seems quite small until you consider my CETV is close to £700k. So £21k (probably + VAT) and then they are looking to manage my account at a further yearly cost of 1%. In the event my SIPP value remained constant IFA would receive £56k in the 1st 5 years. Proceed with extreme caution would be my advice!! (And advise your kids to look into IFA as a career).
  • Teaandscones
    Teaandscones Posts: 144 Forumite
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    If you have got enough to live on without transferring then why bother? Yes you might do better and leave more money for your heirs, but you may also spend time worrying about running out of money, particularly if you are not an experienced investor.

    There may be special situations why transferring is a good idea such as serious ill health or sufficient other independent sources of income, but these are not the norm. As such ask yourself what makes your position so special? If you can't come up with a good answer, then leave things alone.
  • C_Mababejive
    C_Mababejive Posts: 11,654 Forumite
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    This is only hearsay so treat it as such but i work in an industry where a lot of people have suddenly decided its a good time to transfer out their DB pensions. A small number of IFAs seem to have cornered most or all of them ,simply by word of mouth . I have heard of promises of 10% return a year. Now the people to whom these DB pensions belong, mostly have very little knowledge of financial matters . They are being charged around 1% management on pots of circa 600k to 800k.

    I have heard hearsay of one persons pot that has only increased by 0.5% in value in the first year.

    I strongly suspect there will be a lot of buyers remorse in the next few years ,especially when the current bull run ends.
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
  • Turpinr
    Turpinr Posts: 53 Forumite
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    Mine is roughly similar. £17165 ish at 65 but only £11604 to retire at 60 years, 8 months (new year)
    Reduction factor at 60 was a whopping 36.9 % and then roughly 6%/annum after that.
    Transfer value was £339,000 which doesnt look great so I'll have to carry on working
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    C_Mababejive wrote: »
    I strongly suspect there will be a lot of buyers remorse in the next few years ,especially when the current bull run ends.

    Hardly one of them will admit to being a chump. They'll thceam and thceam until they are thick. They'll cry mis-selling. They'll demand compensation.
    Free the dunston one next time too.
  • C_Mababejive
    C_Mababejive Posts: 11,654 Forumite
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    kidmugsy wrote: »
    Hardly one of them will admit to being a chump. They'll thceam and thceam until they are thick. They'll cry mis-selling. They'll demand compensation.


    They will indeed. Why only this very morning whilst enjoying a lite full English that i prepared for myself and the current Ms Mababejive, whilst listening to classic FM there was an advertisement for a claims firm punting for clients who felt they had been wrongly advised to transfer their DB pension to a SIPP or other vehicle.


    With a 1% AMC on a 700,000 pot,well that figure 1 looks small but magnify it over maybe 20 years and it looks frightening.

    The people that i speak of though are largely oblivious to it.
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
  • JoeCrystal
    JoeCrystal Posts: 3,013 Forumite
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    kidmugsy wrote: »
    Hardly one of them will admit to being a chump. They'll thceam and thceam until they are thick. They'll cry mis-selling. They'll demand compensation.

    They will no doubt come to this forum crying about how they was badly advised. I am quite looking forward to the posts actually once we get to another big crash. :D
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