Pension Pot

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  • sandsy
    sandsy Posts: 1,716
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    jamesd wrote: »
    You're then free to ignore the advice. Some advisers apparently will refuse to say you have received advice if you don't want them to do the transfer work (and charge for it). Others may refuse to say you've received advice if their advice is not to transfer.

    Under current rules advisers are required to do things like assuming you'll buy a lifetime annuity with the whole pot even though that's an inappropriate product for early retirement, where your need will be drawdown until state pension age then if you're normal, state pension and gradually reducing income need for the rest of your life. This standard analysis is also required to assume investment growth that is well below historic levels.

    In essence, the mandated analysis is rigged to make transferring look bad and it'll suggest bad when it's really good.

    Advisers can add to this and explain why that standard is not applicable to your circumstances. Ensure that you give them sufficient information to do so, like that summary of likely income changing need that I gave.

    What rubbish. The comparison against an annuity is just one part of the advice. And one which has largely been blown out of all proportion by TVAS software providers. Consequently, far too many advisers focus only on the critical yield and the regulator has said as much.

    At the end of the day, the requirement is for suitable advice. If a transfer to a drawdown is suitable, then the advice should be able to demonstrate why this is the case, irrespective of the annuity comparison.
  • atush
    atush Posts: 18,719
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    Do you have a spouse and dependents? Are you familiar with the death benefits of your scheme?

    Do you have any experience in investing, such that you think you can do better than a guaranteed indexed pension?
  • jamesd
    jamesd Posts: 26,103
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    edited 14 September 2017 at 4:13PM
    sandsy wrote: »
    What rubbish. The comparison against an annuity is just one part of the advice. And one which has largely been blown out of all proportion by TVAS software providers. Consequently, far too many advisers focus only on the critical yield and the regulator has said as much.
    The standard is rubbish and as I wrote "Advisers can add to this and explain why that standard is not applicable to your circumstances".

    Unfortunately the replacement standard also looks to be rubbish, again assuming that people will have lower than historic returns and throw away half of their income potential by buying a lifetime annuity that's unlikely to be a proper match for their income need. At least they won't be required to assume that the transfer is a bad idea unless they can prove otherwise if the proposed change happens.

    Fortunately, since the pension freedoms people are allowed to completely ignore the advice if they want to and transfer anyway, so advisers who may be overly cautious about their own redress risk and hence not recommend appropriate transfers can't block transfers so easily any more.
  • Yes that's what I'm really looking for. Any recommendations for reasonable advisors who won't block or refuse to transfer, because their overall advise is to stay in a DB scheme. At the end of the day, I will listen to the advise, but if it's my legal right, and if it's still my express wish to transfer, then that's what I'm looking to do, obviously signing to say that it is my decision not to take that advise.

    Some IFA/FA's stipulate on their websites, they will only carry out a transfer if they recommend it. I get they have to earn their money in fees and protect their reputations, but where is my opportunity to exercise my legal right and transfer?
  • cloud_dog
    cloud_dog Posts: 6,026
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    K_E_A, may I ask....Why such a blinkered view?
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • xylophone
    xylophone Posts: 44,140
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    but where is my opportunity to exercise my legal right and transfer?

    When you have taken the advice and found a scheme that will accept the transfer, even against advice.
  • jamesd
    jamesd Posts: 26,103
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    K_E_A wrote: »
    Some IFA/FA's stipulate on their websites, they will only carry out a transfer if they recommend it. I get they have to earn their money in fees and protect their reputations, but where is my opportunity to exercise my legal right and transfer?
    There are two parts, the advice and whether they will carry out the transfer. You can carry out the transfer yourself once you have the advice. What you want to do is ensure that whatever their advice is, they will say that you did get advice, fulfilling the DB scheme's legal obligation to ensure that you received advice.
    cloud_dog wrote: »
    K_E_A, may I ask....Why such a blinkered view?
    K_E_A wrote: »
    I'm in a Defined Benefit Pension Scheme in the electricity industry. I'm 55 and waiting for my transfer quote. It's my intention to retire early on receipt and work part-time for myself.
    It's not a blinkered view, it's what's required to achieve their retirement objective most efficiently.

    Even if they wanted to accept an actuarial reduction for retiring at 55, that would still be a mismatch of income provision vs income need, leaving them with a surplus income once the state pension starts and/or too little income until then.

    The transfer gets rid of that mismatch and allows arbitrary amounts of guaranteed income to be purchased either via state pension deferral or annuity buying, if there's a desire for any more guaranteed than the state pension provides.

    Unfortunately DB schemes aren't required by law to offer partial transfers as they are for full ones. Quite often a good solution could involve keeping some DB if that was available.
  • cloud_dog
    cloud_dog Posts: 6,026
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    K_E_A wrote: »
    So I'm looking for recommendations for companies/IFA's who do not insist on a positive recommendation to transfer. Not looking to make rash decisions either, but also not looking to waste time and money with those who won't/can't accommodate this from the outset.
    As I said....a blinkered view. A view/course that is set before the availability and consideration of the facts at hand.

    Have zero issues with the OPs desired end result (good luck to him, I hope he can achieve what he needs to) but at least take the time to digest the facts and the implications.
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
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