Pension company not telling me what my pots worth

singhini wrote: »

Hold on; ive just had a thought: if its a final salary pension then the pot wont go up or down (the £80,000 pot will always be £80,000) and I will only ever get an annual pension of £3,500

There is no pot. What there s is a transfer value which is the amount they will pay you to take the obligation of paying the pension of their hands. That will be a bit less than they expect it to cost them, and may go up or down.

Further the pension is probably indexed linked, but you should check your scheme details to make sure.

singhini wrote: »

I worked at this place for about 7 years and even though its a final salary pension the £3,500 is rubbish (I would rather leave it with them until I'm 54 and transfer it into a cash SIPP and when I turn 55 and retire start to take the money as cash withdrawals: taking £11,500 each year out thus avoiding income tax and spending all the money over 7 ish years)
Everyone keeps saying final salary pensions are brilliant - well my one isn't its a bag of old nails boo hiss

So for a 7 year stint you get a pension of £3500 which is probably index linked. Given we all work for let's say 40 years if you had had another 6 jobs with the same pension you would be looking at £25k pension plus another £8k state pension. That's not horrendous and if there's 2 of you not bad at all.

I worked at this place for about 7 years and even though its a final salary pension the £3,500 is rubbish

Hang on, they are effectively saying they'll give you £3,500 a year, plus indexing, plus spousal benefits for seven years work. And pay it for the rest of your life after age 65. Wow.

£80,000 pot value.

How much were your own contributions to achieve this "rubbish" return?

You don't have a pot. You have a promise to pay you a guaranteed inflation proofed income for life. The level of income (rubbish or not, depending on your perspective) was determined by the length of time you worked there and your salary at the date you left.

It is possible to give up all your rights to this really valuable index-linked pension (often referred to as the gold standard of pensions) and take a transfer value instead. The transfer value is calculated on the basis of an equivalent value of what it would cost the scheme to provide your final salary pension. So you don't specifically gain anything through taking the CETV per se.

The equivalent value is based on assets return the scheme expect to achieve over your likely remaining future lifetime - it's a complicated calculation and allow for the fact that your benefits increase in line with an assumed rate of future inflation. If asset returns are expected to change, or their expectations of inflation change or future life expectancies change, so can your value. If nothing changes, your value will generally go up as you get older and get nearer the payment date.

When you transfer, you have to put it into another pension which you can't touch until you reach the minimum access age. This comes with no promises. Investments will need to be chosen and these will fluctuate in value in line with the underlying assets that the money is invested in. Overtime, it's generally hoped they would go up in value You then have the opportunity to withdraw the money in a pattern that suits you once you access the funds, rather than the defined method dictated by a DB scheme.

However, by law, you can't do this without taking regulated financial advice since your CETV is worth more than £30k. And that will probably cost at least £2k. There are no guarantees that you'll get a green light form the adviser to transfer if their professional opinion is that it's not in your best interests. However, once you've taken the advice, you don't have to follow it, if you can find a pension provider who'll accept your money anyway.