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  • FIRST POST
    • Wolf52
    • By Wolf52 28th Nov 17, 8:41 PM
    • 20Posts
    • 9Thanks
    Wolf52
    Final Salary Scheme
    • #1
    • 28th Nov 17, 8:41 PM
    Final Salary Scheme 28th Nov 17 at 8:41 PM
    Hello, I have a DB pension which has been deferred. I am waiting to receive a CETV for this as well forecasts of what it would be worth as a pension if taken at ages 55 and 60 with and without lump sums. I'm thinking that I would like to transfer my DB pension so that I can use the lump sum to pay off the mortgage and draw down thereafter if required.

    As a back-up, I also will have full State Pension and (if I stay working for the next 20 years), 26 years worth of NHS pension (the 2008 and 2015 Schemes).

    My husband is a brain tumour survivor with a limited life expectancy and I would like to be able to leave some of the DB pension to our only child (currently a teenager) which of course I would be unable to do under that scheme. My own health isn't great, I have autoimmune diseases, but nothing that will limit life expectancy. My husband will have a state pension, but unlikely to be a full one. He also has two small personal pensions that aren't worth very much as he is unable to pay into them.

    Do you think this would be a sensible course of action from me - I've just turned 49.

    thanks
Page 1
    • p00hsticks
    • By p00hsticks 28th Nov 17, 10:39 PM
    • 6,284 Posts
    • 6,776 Thanks
    p00hsticks
    • #2
    • 28th Nov 17, 10:39 PM
    • #2
    • 28th Nov 17, 10:39 PM
    Do you think this would be a sensible course of action from me - I've just turned 49.
    Originally posted by Wolf52
    Without knowing the figures, and how comfortable you would be handling your investment risk if you moved to a DC pension, my opinion is that it's not possible to say - I suggest you post back when you have the figures you have asked for.
    • Wolf52
    • By Wolf52 29th Nov 17, 5:38 AM
    • 20 Posts
    • 9 Thanks
    Wolf52
    • #3
    • 29th Nov 17, 5:38 AM
    • #3
    • 29th Nov 17, 5:38 AM
    Okay thanks I will.
    • bostonerimus
    • By bostonerimus 29th Nov 17, 1:07 PM
    • 2,021 Posts
    • 1,337 Thanks
    bostonerimus
    • #4
    • 29th Nov 17, 1:07 PM
    • #4
    • 29th Nov 17, 1:07 PM
    With interest rates so low I'm not sure that using the lump sum to pay down the mortgage is the best idea.

    When you get the numbers let us know. The CETV can be very tempting and look like a better deal than the final salary pension, but once all the costs and risks of investing the CETV are assessed it often isn't such a clear cut decision. However, wanting to leave an inheritance and health issues are factors in favor of taking the CETV.
    Misanthrope in search of similar for mutual loathing
    • Wolf52
    • By Wolf52 20th Dec 17, 1:26 PM
    • 20 Posts
    • 9 Thanks
    Wolf52
    • #5
    • 20th Dec 17, 1:26 PM
    • #5
    • 20th Dec 17, 1:26 PM
    Hi just an update, spoke to Capita this morning as it's been a month since I asked for the valuations and wanted to check they hadn't been lost in the post. Well they haven't sent them out yet, apparently they're checking the figures.

    Will update once these are received.

    Happy Christmas
    • xylophone
    • By xylophone 20th Dec 17, 2:00 PM
    • 25,762 Posts
    • 15,222 Thanks
    xylophone
    • #6
    • 20th Dec 17, 2:00 PM
    • #6
    • 20th Dec 17, 2:00 PM
    My husband will have a state pension, but unlikely to be a full one. He also has two small personal pensions that aren't worth very much as he is unable to pay into them.
    Has your husband obtained a state pension statement?

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

    Is he unable to work? Is he receiving NI credits?

    https://www.gov.uk/national-insurance-credits

    Even if he has no relevant earnings he can pay up to 2880 into a personal pension each year and receive tax relief.

    If you want to transfer out of a DB pension with a value greater than 30,000 you will require the advice of a pension transfer specialist.

    http://forums.moneysavingexpert.com/showthread.php?p=73588433#post73588433
    • Wolf52
    • By Wolf52 21st Dec 17, 7:44 PM
    • 20 Posts
    • 9 Thanks
    Wolf52
    • #7
    • 21st Dec 17, 7:44 PM
    • #7
    • 21st Dec 17, 7:44 PM
    Has your husband obtained a state pension statement?
    Is he unable to work? Is he receiving NI credits?
    Even if he has no relevant earnings he can pay up to 2880 into a personal pension each year and receive tax relief.
    Yes, I've checked his NI record and he has about 5 years incomplete although he now receives credits via ESA and is slowly rebuilding this. He's not able to work due to the tumour, seizures, fatigue and visual disturbance. Also not allowed to travel anywhere on his own for his own safety. Thank you for the links. He literally has no income to pay into his personal pensions, and I can't afford to do so for him.

    I would imagine the CETV will be greater than 30k and will look for an appropriate IFA with DB transfer experience.

    Nina
    • Wolf52
    • By Wolf52 17th Jan 18, 9:34 AM
    • 20 Posts
    • 9 Thanks
    Wolf52
    • #8
    • 17th Jan 18, 9:34 AM
    • #8
    • 17th Jan 18, 9:34 AM
    Update.

    I rang Capita to find out when I would be hearing from them and they've told me that the actuaries are reviewing their procedures on providing CETVs. I should expect to hear from them early March.
    • GunJack
    • By GunJack 17th Jan 18, 10:44 AM
    • 10,220 Posts
    • 7,657 Thanks
    GunJack
    • #9
    • 17th Jan 18, 10:44 AM
    • #9
    • 17th Jan 18, 10:44 AM
    ^^ that sucks, especially when you asked last Nov
    ......Gettin' There, Wherever There is......
    • Wolf52
    • By Wolf52 17th Jan 18, 11:15 AM
    • 20 Posts
    • 9 Thanks
    Wolf52
    Yep, I agree, knowing my luck, the figure will be about 10 times rather than the 30 to 40 times they have been offering.
    • HappyHarry
    • By HappyHarry 17th Jan 18, 2:10 PM
    • 676 Posts
    • 968 Thanks
    HappyHarry
    The trustees have a maximum of three months to set a guarantee date (i.e. the date at which the CETV is set) and they have a further ten days from that date to let you know the actual CETV.

    e.g. If you requested a CETV on 10th November, then they must prepare a CETV for no later than 10th February, and they then have to let you know that CETV by 20th February.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
    • Silvertabby
    • By Silvertabby 17th Jan 18, 3:53 PM
    • 2,996 Posts
    • 4,281 Thanks
    Silvertabby
    The trustees have a maximum of three months to set a guarantee date (i.e. the date at which the CETV is set) and they have a further ten days from that date to let you know the actual CETV.

    e.g. If you requested a CETV on 10th November, then they must prepare a CETV for no later than 10th February, and they then have to let you know that CETV by 20th February.
    Originally posted by HappyHarry
    Not if the pension is public sector (specifically LGPS, as this is only public sector pension that can still be transferred out). If it is LGPS, and they are awaiting new factors from GAD, then the 3 month rule doesn't apply.

    The LGPS I worked for would only supply really urgent CETVs (usually for divorce calculations) during the waiting period, and even these stressed that the transfer value wasn't guaranteed and could change once the new factors had been received.
    Last edited by Silvertabby; 17-01-2018 at 3:57 PM.
    • HappyHarry
    • By HappyHarry 17th Jan 18, 4:53 PM
    • 676 Posts
    • 968 Thanks
    HappyHarry
    Not if the pension is public sector (specifically LGPS, as this is only public sector pension that can still be transferred out). If it is LGPS, and they are awaiting new factors from GAD, then the 3 month rule doesn't apply.
    Originally posted by Silvertabby
    Thanks, I wasn't aware of that!
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
    • Wolf52
    • By Wolf52 17th Jan 18, 5:37 PM
    • 20 Posts
    • 9 Thanks
    Wolf52
    Thank you I wasn't aware of that either, HappyHarry and Silvertabby. Btw this one is not a public sector pension although I will have a NHS pension when the time comes.

    Nina
    • Wolf52
    • By Wolf52 15th Mar 18, 4:59 PM
    • 20 Posts
    • 9 Thanks
    Wolf52
    I have finally received the various figures requested from Capita, as follows:

    Taking pension at 55 will give me a pension of 4328.98 with a 25% lump sum of 22231.49.

    Taking pension at 60 will give me a pension either a full pension of 5178.95 or a reduced pension of 3890.49 with a 25% lump sum of 25936.62.

    CETV has been given as 177615.42.

    The CETV does look appealing especially as I can use 25% to reduce mortgage (poor credit rating due to hubby's health means I cannot look for a more cost effective mortgage at present) which will be very useful, leaving about 134k pot.

    Now off to find an IFA who deals with these things.

    Nina
    • kidmugsy
    • By kidmugsy 15th Mar 18, 5:24 PM
    • 11,052 Posts
    • 7,610 Thanks
    kidmugsy
    Taking pension at 55 will give me a pension of 4328.98 with a 25% lump sum of 22231.49.

    CETV has been given as 177615.42.
    Originally posted by Wolf52
    What are the terms on the inflation-protection offered by the pension? If they are excellent, e.g. full RPI linking, think carefully before you give them up. If they are miserable, e.g. CPI capped at 2.5% p.a., you might incline more to be gung-ho about the transfer.
    Free the dunston one next time too.
    • xylophone
    • By xylophone 15th Mar 18, 5:41 PM
    • 25,762 Posts
    • 15,222 Thanks
    xylophone
    Now off to find an IFA who deals with these things
    Post 6
    http://forums.moneysavingexpert.com/showthread.php?t=5760567

    Be careful - you say that you will need to work for another 20 years for that NHS pension but you also say that you have health problems of your own. They might be severe enough to make work difficult but not enough to secure an ill health pension.

    You mention 134,000; it looks like a large sum but it is only around five times average annual earnings?

    https://www.royallondon.com/Global/documents/GoodWithYourMoney/COMPANY-PENSIONS-FIVE-REASONS-TO-TRANSFER-OUT-AND-FIVE-REASONS-NOT-TO.pdf
    • Wolf52
    • By Wolf52 15th Mar 18, 6:14 PM
    • 20 Posts
    • 9 Thanks
    Wolf52
    thank you both, food for thought. Incidentally I noticed my letter was dated 19/2, but not received until today 15/3 ... giving me only 8 weeks to sort what I want to do!
    • Thrugelmir
    • By Thrugelmir 15th Mar 18, 7:12 PM
    • 59,225 Posts
    • 52,609 Thanks
    Thrugelmir
    Taking pension at 55 will give me a pension of 4328.98 with a 25% lump sum of 22231.49.

    Taking pension at 60 will give me a pension of 3890.49 with a 25% lump sum of 25936.62.
    Originally posted by Wolf52
    Why the disparity?
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Wolf52
    • By Wolf52 16th Mar 18, 7:02 AM
    • 20 Posts
    • 9 Thanks
    Wolf52
    Why the disparity?
    Originally posted by Thrugelmir
    I've no idea, just what it says in the letters.
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