DB pension question

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Legacy_user
Legacy_user Posts: 0 Newbie
in Pensions, annuities & retirement planning
Not that i intend to but if i was to keel over and go southbound on a one way ticket throu the big white gates a week after i retire and claim my DB pension i understand my wife will get half of what i would of had however it will mean she will have to live a very long time to break even so to speak in relation to the money in the pot. And worse case scenerio what happens if she follows me a month after . What happens to all the money?.
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  • dmelife
    dmelife Posts: 133 Forumite
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    There is probably a 5yr guarantee on it and it will pay out for that period.
  • Albermarle
    Albermarle Posts: 22,179 Forumite
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    Just the same as an annuity , if you die early then the pension/insurance company gets the major benefit of the pension not taken. On the other side if you live to a 100 , with the inflationary increases, it will cost them a lot of money .
    In simple terms those dying early pay for those living longer.
  • ratechaser
    ratechaser Posts: 1,674 Forumite
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    ... although of course we are ALL living longer these days. So goodbye DB schemes and hello poor annuity rates on DC schemes.

    No wonder drawdown is increasingly popular...
  • tacpot12
    tacpot12 Posts: 7,972 Forumite
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    Nikond4 wrote: »
    ... however it will mean she will have to live a very long time to break even so to speak in relation to the money in the pot.

    If you die, the pot is halved. Half goes to your wife for as long as she lives and the other half goes to provide a pension for those in the scheme who outlive you. So you wife doesn't have to live any longer than you to "break even". She actually breaks even if she receives one payment from your pension, because she didn't pay for it. And don't forget that women tend to live longer than men...

    You wife will be a big winner if you die early, she gets all her own pension and half of yours; index-linked, guaranteed for life, with no work or worry required. Don't you want to leave your wife a life that is free of worry?
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • barnstar2077
    barnstar2077 Posts: 1,364 Forumite
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    lol the way Tacpot12 describes it, I would get out of the house and hide while you still can if I was you! :rotfl:
    Think first of your goal, then make it happen!
  • Marcon
    Marcon Posts: 10,690 Forumite
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    tacpot12 wrote: »
    If you die, the pot is halved.

    There is no pot; it's a DB scheme.
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • debroxton
    debroxton Posts: 14 Forumite
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    I am single and my children are all over 21 - from what I understand, all the money in my pension pot will be lost - I'm seriously thinking about transferring out of my DB pension. The value of my pot is over £500,000, I smoke and I drink, so probably won't live long enough for it to be worthwhile staying in.
  • Flugelhorn
    Flugelhorn Posts: 5,584 Forumite
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    There isn't a pot for a DB pension - they don't stop paying when it runs out.

    are you taking your max TFLS if you are concerned about the money being left when you die?
  • Albermarle
    Albermarle Posts: 22,179 Forumite
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    The value of my pot is over £500,000, I smoke and I drink, so probably won't live long enough for it to be worthwhile staying in.
    If you transfer the £500K and then a week/month later the market crashes 25% , then you might find your self drinking and smoking more !
    Or if you pay an IFA >£5K and then they recommend not to transfer anyway
    In case you have not read them there are a couple of useful articles n the subject + many threads on this forum on DB transfers.
    https://www.moneyobserver.com/final-salary-pension-transfers-scenarios-when-you-should-consider-transferring
    https://www.savvywoman.co.uk/2016/12/pros-cons-transferring-final-salary-pension/
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    ratechaser wrote: »
    ... although of course we are ALL living longer these days. So goodbye DB schemes and hello poor annuity rates on DC schemes.

    No wonder drawdown is increasingly popular...

    Be interesting to look back at this in another 10 years time........
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