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    • pip895
    • By pip895 22nd Sep 17, 10:16 AM
    • 577Posts
    • 321Thanks
    Transfering DB to SIPP
    • #1
    • 22nd Sep 17, 10:16 AM
    Transfering DB to SIPP 22nd Sep 17 at 10:16 AM
    I know this subject has been done to death and the consensus view is "DONT DO IT" but I am seriously considering it anyway. I am 55 and semi retired.

    The policy concerned was worth a fairly poultry £5000/anum when I left the employment back in 2002 but is now worth £11000 and when I get to 65 will start giving me an income of around £18,000 increasing at the rate of just under 5%/anum.

    The transfer value of the policy was £162,000 in 2011 but has escalated to a whopping £483,000 today. I can only see this figure going down from here with interest rates beginning to rise?? So if I want to transfer I think now is the time.

    Putting the figures in to a spreadsheet allows me to calculate that if I were to extract the money and sit it in a bank account without interest – then pay out at the rate of the payments I would have been due under the policy, I would run out of money age 79. If I were to get 3% interest on the money it would last me to 89 and at 5% it would last me to 105 at which time I would be receiving a rather impressive sounding £125k/anum.

    The concern for me is inflation. If this policy were index linked we wouldn’t be having this conversation – It would squarely tick one of my concern boxes and I would leave well alone.
    I could take the money and annuitize it. Initial enquires seem to suggest that I could get an index linked income of £10k starting now which would actually be quite useful, or I could just add it to my SIPP with all its potential IHT advantages – or do a bit of both perhaps.

    Other pertinent points – I am married and have a teenage daughter (OH is a fair bit older than me and already drawing his state pension). We own our own home, have a rental property and are mortgage free. Total other assets (SIPP’s ISA’s, savings accounts etc in excess of 1 million). We don’t however have any other DB pensions or annuities.

    Should I start down the road of getting the advice necessary to do this? It seems a rather expensive process - I have been quoted £1500 for an initial consultation + just under 1.5% of the transfer value. Seems extortionate but I’m not sure there is a way around it.
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    • Brynsam
    • By Brynsam 3rd Oct 17, 11:51 PM
    • 1,144 Posts
    • 771 Thanks
    Been trying to transfer my DB pension this year-missed the initial 3 month CETV window in May (for various reasons) so paid for a 2nd CETV last month and to my surprise the transfer value has increased by 26% as the scheme trustees " were keen to give members a better deal?!"
    So each scheme really has it`s own agenda depending on liabilities moving forward and long term fund sustainability.
    Originally posted by gonedownthepub
    The scheme trustees " were keen to give members a better deal?!" - I wonder who on earth spun you that line...
    • dunstonh
    • By dunstonh 4th Oct 17, 1:29 AM
    • 93,005 Posts
    • 60,391 Thanks
    The figures I was given were for Standard life and they were more expensive than the deal I have with HL?? Then I had to pay another 1% ongoing fee to them, for ongoing advice.
    That does not make sense. Std Life operate two platforms. Both of them are cheaper than HL.

    As I have already said, the 1% ongoing fee is optional.

    If costs are that much of a concern then a personal pension would be cheaper than both HL and Std Life.

    Interesting so they would for instance say that the move was "too risky" if I was self managing.
    If you have no history of managing investments and are looking to build a bespoke portfolio yourself, they may well say they consider it inappropriate.

    In cases where there is no ongoing servicing, the investments recommended may be more basic.

    Could I still take that report to HL and say "I've taken advice but I have decided to ignore it" or do you have to go with the advice?
    The IFA signs to say advice was given. Some providers will only accept a positive recommendation to transfer to them.

    Alternatively could I go along with the advisors suggestion and get a positive recommendation to move but at the last minute divert the money to HL?
    That does not change a thing as the IFA still has to sign HL's forms.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • gonedownthepub
    • By gonedownthepub 4th Oct 17, 6:53 AM
    • 82 Posts
    • 32 Thanks
    So far I have spoken to two advisors one over the phone and the other face to face and neither is willing to sign off on a transfer to HL, although they have indicated that they would "probably" recommend a transfer.

    Their costs are less than using the HL advisory service but by the time you add additional ongoing yearly costs (platform and advice) they work out more expensive after only one year. Is keeping control of the money a common restriction?
    Originally posted by pip895
    The scheme trustees " were keen to give members a better deal?!" - I wonder who on earth spun you that line...
    Originally posted by Brynsam
    Quite simple really the scheme advised me of this prior to changing factorisation to x40
    • Malthusian
    • By Malthusian 4th Oct 17, 10:10 AM
    • 4,247 Posts
    • 6,686 Thanks
    Alternatively could I go along with the advisors suggestion and get a positive recommendation to move but at the last minute divert the money to HL?
    Originally posted by pip895
    Not exactly (as per DunstonH). But you could 1) accept the adviser's recommendation to transfer into Standard Life into a sensible diversified portfolio, then 2) terminate the servicing agreement and transfer the pension from SL to HL and invest in whatever you like. At point 2) it's transferring a personal pension to another personal pension so there are no regulations about requiring advice and HL will not require any sign-off from an adviser.

    You would still have to pay any initial fees agreed with the IFA but not the ongoing fee.

    You would be paying more for less but it's your money.

    No reputable IFA will recommend that someone transfers out of a DB pension and into ????? for ????? reasons. So to transfer directly to a DIY provider to self-manage you are going to have to go down the insistent client route. The only platform I know of that will accept insistent clients is AJ Bell and the number of IFAs willing to help insistent clients go against their advice is also more limited.
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