Final Salary Pension Transfers

DonPatch · 25 January 2020 at 9:50AM

Hello,

I would like some general guidance on a final salary pension if possible please.

I have a small final salary pension from Barclays. I left almost 14 years ago and it was worth £1390 a year, it is now £2094, so looks like it has been increasing by 3% a year. I assume it will keep doing that till I'm 60 which is the deferred date.

I am almost 40 years old and have been given a transfer out figure of approx £103,000.

I know that I have always been of the thought to leave it alone, but as I have many years before retirement and its a small pension, I wonder if that is the best course of action and maybe it might be worth transferring to my existing pension?

Thanks in advance

Dazed_and_confused · 25 January 2020 at 10:12AM

That all made sense and the CETV figure certainly makes it worthy of consideration until this

I wonder if that is the best course of action and maybe it might be worth transferring to my existing pension?

How do you expect anyone to be able to give a useful repsonse when you haven't told us what your existing pension is.

Are you in the MP's scheme?
Teachers Pension
Civil Service Alpha
NHS
Nest
Joe Bloggs Ltd scheme
Defined Contribution scheme of your own choice?

hyubh · 25 January 2020 at 10:12AM

DonPatch wrote: »

I have a small final salary pension from Barclays. I left almost 14 years ago and it was worth £1390 a year, it is now £2094, so looks like it has been increasing by 3% a year. I assume it will keep doing that till I'm 60 which is the deferred date.

I would imagine it's statutory revaluation on 97-09 excess, so inflation capped to 5%, though the calculation is technically a start-to-end rather than year-by-year one.

Once it comes into payment, statutory increases are similar (inflation capped to 5% for 97-05 excess), though there is more potential for above-statutory increases depending on the rules of the scheme (e.g. without the 5% cap, with a 3% minimum, etc.).

I know that I have always been of the thought to leave it alone, but as I have many years before retirement and its a small pension, I wonder if that is the best course of action and maybe it might be worth transferring to my existing pension?

A popular question - I would imagine people keen to let you know their thoughts will be around soon

bolwin1 · 25 January 2020 at 10:15AM

Assuming the pension is payable from 60, 50% spouse benefit & with 'normal' increases in retirement etc... At a multiplier of around 50, that is a very generous transfer value.

It's certainly worth considering, but as it's over £30,000 you will need to get advice from an Independent Financial Adviser, which would cost several thousand pounds. It won't be easy to find one as you'll see from multiple threads on here.

DonPatch · 25 January 2020 at 10:41AM

Thank you. I think maybe I should find out more particulars on how it would grow and the benefits. It definitely has the 50% spouse benefit.

Dazedandconfused -
Sorry did not realise, I should have said.
I have two employer pensions. My old company pension value is £84,000 and my new one is £16,000.
I pay, along with my employer a total of 18% of my salary.
I dont have any other pension savings.

Albermarle · 25 January 2020 at 11:29AM

You could try putting ' Final salary' or 'transfer ' in the search box and search the board . You will see regular similar questions and answers. Not just about if to transfer but the process ( which is expensive and not simple )
Also you could read this :
https://www.royallondon.com/siteassets/site-docs/media-centre/good-with-your-money-guides/five-good-reasons-good-with-your-money-guide-2018-edition.pdf

xylophone · 25 January 2020 at 3:20PM

What does your scheme booklet have to say about increases in deferment and in payment?

Have you obtained a state pension statement?

https://www.gov.uk/check-state-pension

The other pensions are defined contribution pensions?

With regard to the transfer out, you would need to take the advice of a pension transfer specialist which would not be cheap.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/pension-transfers-conversions/

You would wish to ensure before you engaged him that regardless of whether or not his advice is positive, he would be prepared to confirm in the form prescribed by the ceding/accepting scheme that the advice has been given.

Not all schemes will accept transfers in, particularly if a DB transfer against advice.

https://adviserbook.co.uk/ You would tick confirmed independent and pension transfer

davidwatts · 26 January 2020 at 2:47PM

DonPatch wrote: »

I am almost 40 years old and have been given a transfer out figure of approx £103,000.

Did you ask for it or did they just provide it, e.g. because they are making changes to the scheme or as an enhanced value?

If the latter then it should come with the offer of paid for financial advice. Worth taking such "free" advice if available, to help you make a decision.

MightyMythop · 26 January 2020 at 3:00PM

Whilst you may want to transfer your pension, it's getting increasingly harder to find advisers (and you have to go through an IFA as it's
+£30K value) who carry out this work mainly due to the spiralling costs of PI insurance since the British Steel pension scandal, that make this kind of work more risky to the IFA business and the client.

There will be some in your area no doubt but the costs should be c3-5% of your £103K pot and you should be wary of any firm simply doing this for you on a transactional basis.

They should go through a full & proper examination of your reasons for doing this and whether it is of course suitable. The adviser should, by definition of the FCA, consider a transfer to not be suitable in the first instance.

t only nearly 40, I would ask the question "what's the rush"? Unless you are in serious ill health there's really no need to consider this at your current age.

Final Salary Pension Transfers

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