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    • dmelife
    • By dmelife 13th Jun 19, 4:54 PM
    • 108 Posts
    • 96 Thanks
    dmelife
    • #2
    • 13th Jun 19, 4:54 PM
    • #2
    • 13th Jun 19, 4:54 PM
    There is probably a 5yr guarantee on it and it will pay out for that period.
    • Albermarle
    • By Albermarle 13th Jun 19, 5:23 PM
    • 1,564 Posts
    • 997 Thanks
    Albermarle
    • #3
    • 13th Jun 19, 5:23 PM
    • #3
    • 13th Jun 19, 5:23 PM
    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
    • By ratechaser 13th Jun 19, 5:59 PM
    • 623 Posts
    • 530 Thanks
    ratechaser
    • #4
    • 13th Jun 19, 5:59 PM
    • #4
    • 13th Jun 19, 5:59 PM
    ... 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
    • By tacpot12 13th Jun 19, 6:28 PM
    • 2,899 Posts
    • 2,623 Thanks
    tacpot12
    • #5
    • 13th Jun 19, 6:28 PM
    • #5
    • 13th Jun 19, 6:28 PM
    ... 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.
    Originally posted by Nikond4
    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 check official information sources before relying on my posts.
    • barnstar2077
    • By barnstar2077 13th Jun 19, 7:22 PM
    • 221 Posts
    • 359 Thanks
    barnstar2077
    • #6
    • 13th Jun 19, 7:22 PM
    • #6
    • 13th Jun 19, 7:22 PM
    lol the way Tacpot12 describes it, I would get out of the house and hide while you still can if I was you!
    If you don't have your own plan, then you're following someone else's!
    • Marcon
    • By Marcon 14th Jun 19, 8:44 AM
    • 1,266 Posts
    • 1,002 Thanks
    Marcon
    • #7
    • 14th Jun 19, 8:44 AM
    • #7
    • 14th Jun 19, 8:44 AM
    If you die, the pot is halved.
    Originally posted by tacpot12
    There is no pot; it's a DB scheme.
    • debroxton
    • By debroxton 16th Jun 19, 1:57 PM
    • 10 Posts
    • 4 Thanks
    debroxton
    • #8
    • 16th Jun 19, 1:57 PM
    • #8
    • 16th Jun 19, 1:57 PM
    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
    • By Flugelhorn 16th Jun 19, 2:01 PM
    • 1,566 Posts
    • 2,045 Thanks
    Flugelhorn
    • #9
    • 16th Jun 19, 2:01 PM
    • #9
    • 16th Jun 19, 2:01 PM
    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
    • By Albermarle 16th Jun 19, 2:03 PM
    • 1,564 Posts
    • 997 Thanks
    Albermarle
    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
    • By Thrugelmir 16th Jun 19, 2:41 PM
    • 64,860 Posts
    • 57,226 Thanks
    Thrugelmir
    ... 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...
    Originally posted by ratechaser
    Be interesting to look back at this in another 10 years time........
    “If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.”
    ― Niall Ferguson
    • enthusiasticsaver
    • By enthusiasticsaver 16th Jun 19, 8:41 PM
    • 9,219 Posts
    • 21,427 Thanks
    enthusiasticsaver
    Some pensions pay out a lump sum if the pensioner dies within a certain period. My dad died a few months after retiring and my mum got 5 years pension as a lump sum on top of the lump sum he had already received and the monthly payments. My DH pension is the same should he go within the first 5 years of claiming. Both DB pensions.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
  • jamesd
    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 !
    Originally posted by Albermarle
    That would perhaps because the income can easily be twice what the DB pension would pay and a 25% drop a month after transferring makes no difference because safe withdrawal rates are based on far worse than that, so it's party time.
  • jamesd
    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.
    Originally posted by debroxton
    Have a read of the examples linked from here then move on to the rest of the thread to learn more about safe withdrawal rates. It wouldn't be even slightly surprising to find that you could retire early starting on twice the DB income.

    Given the smoking and drinking you might be able to usefully buy an annuity to give you some useful guarantied income. "Enhanced annuities" take individual health and lifestyle factors into account, DB pensions don't.
    • AnotherJoe
    • By AnotherJoe 17th Jun 19, 5:24 AM
    • 15,966 Posts
    • 19,173 Thanks
    AnotherJoe
    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.
    Originally posted by debroxton
    Have you got so little consideration for yourself, your wife and your children you arent looking at changing that ?
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Albermarle
    • By Albermarle 17th Jun 19, 8:44 AM
    • 1,564 Posts
    • 997 Thanks
    Albermarle
    That would perhaps because the income can easily be twice what the DB pension would pay
    Jamesd, I know you are an expert on these matters but still this seems a rather strong statement , when we have no idea what the CETV multiple is . Normally they can be anything from 20X to 40X so it can obviously make a big difference to any calculations .
    • Malthusian
    • By Malthusian 17th Jun 19, 10:07 AM
    • 6,767 Posts
    • 10,963 Thanks
    Malthusian
    Have you got so little consideration for yourself, your wife and your children you arent looking at changing that ?
    Originally posted by AnotherJoe
    I am single and my children are all over 21
    by debroxton in the very first sentence of the bit you quoted
    That said, Britain's oldest woman who just died at (IIRC) 112 put her longevity down to a dram of bad whisky every day. She didn't smoke but there is no shortage of "my Auntie Ethels" who lived into their 90s who did.

    You should probably consider harder drugs if your plan is to spend £500,000 on being smelly and then die. Ecstacy, heroin, spice, cake, clerky cat, etc. Human bodies are resilient and you could find yourself in the nightmare scenario of being both broke and stone cold sober with plenty of years left to go.
    • Audaxer
    • By Audaxer 17th Jun 19, 2:04 PM
    • 1,877 Posts
    • 1,177 Thanks
    Audaxer
    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.
    Originally posted by tacpot12
    His wife might not have a pension of her own, so I don't see how she would break even after one payment. That 50% of his pension might be her only income.

    OP - if you were to take the lump sum, most DB pensions allow the spouse to get 50% of what the full pension would have been if you hadn't taken the lump sum.
    • PennyForThem
    • By PennyForThem 17th Jun 19, 3:38 PM
    • 608 Posts
    • 546 Thanks
    PennyForThem
    As a widow who receives half DB pension and annuity, both of which increase by an inflation %, can I say how important that is to me as a sound basis of receiving known, non reducing income with absolutely no risk?

    (Yes, I have my own pension provision - I am a baby boomer. But the provision made by my husband's choices is a rock.)
    • ratechaser
    • By ratechaser 17th Jun 19, 10:36 PM
    • 623 Posts
    • 530 Thanks
    ratechaser
    Be interesting to look back at this in another 10 years time........
    Originally posted by Thrugelmir
    Indeed it will, given that's about when I'll be able to access my pot. Hopefully by that point there won't be hordes of pensioners that have drawn down their entire pots, frittered it all away and be throwing themselves on the mercy of the state. Last thing I'd want is to be tied back in to buying an annuity because the nanny state feels like it has to step in and change the rules again...
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