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Defined Benefits Transfer (Pension)

PostPosted:Fri Feb 14, 2020 1:28 pm
by Miscellaneous
I have a diddly squat defined benefits pension from 2yrs employment. Unfortunately the transfer value is a little above the no advice required limit of £30k. It seems the rules allegedly introduced to safeguard folks have the opposite effect with such small amounts. With IFAs either frighted of the very words defined benefit transfer, or the value being too small to be of interest. It seems I am being forced to leave it where it is to my financial detriment. :evil:

It's a long shot, but does anyone know a sympathetic IFA able to advise the no brainer transfer approval?

Re: Defined Benefits Transfer (Pension)

PostPosted:Fri Feb 14, 2020 1:44 pm
by GrahamB

Re: Defined Benefits Transfer (Pension)

PostPosted:Fri Feb 14, 2020 1:54 pm
by Miscellaneous
I have thanks @GrahamB, they referred me to a list of advisors I am presently working through.

I thought there may have been an outside chance of a recommendation on the forum.

Re: Defined Benefits Transfer (Pension)

PostPosted:Fri Feb 14, 2020 2:03 pm
by GrahamB
I have had some good advice and guidance from https://www.wealth-matters.co.uk/. You’re not really their target market, but they may be happy to provide a short consultation at a reasonable charge. Bruce Nash has been my contact there.

Re: Defined Benefits Transfer (Pension)

PostPosted:Fri Feb 14, 2020 2:07 pm
by Miscellaneous
GrahamB wrote:You’re not really their target market, but they may be happy to provide a short consultation at a reasonable charge. Bruce Nash has been my contact there.

Thank you :thumright: , I didn't realise there was so much in my post to determine my 'market position'. :lol: :wink:

Re: Defined Benefits Transfer (Pension)

PostPosted:Fri Feb 14, 2020 2:28 pm
by GrahamB
Miscellaneous wrote:
GrahamB wrote:You’re not really their target market, but they may be happy to provide a short consultation at a reasonable charge. Bruce Nash has been my contact there.

Thank you :thumright: , I didn't realise there was so much in my post to determine my 'market position'. :lol: :wink:

'Diddly squat' is a bit of a clue!

Re: Defined Benefits Transfer (Pension)

PostPosted:Fri Feb 14, 2020 9:38 pm
by Leodisflyer
I have a pension from a 3 year service many years ago. The plan is under-funded, there’s been a management buy-out and the company owners paid for advice to give people the option of transferring out at a good value. I took the advice and it came down on the side of keeping the pension where it was.

I‘d have moved it for the convenience, but listening to the advice, and the fact that an old pension like that has guarantees, I ended up agreeing with the advisor that it should stay where it is is. There also remains a lot of economic uncertainty about the future of the country over the next few year as there are some very big unresolved questions, so that was a factor for me. Not politics, just what’s well known. If it were me I’d hold off getting chargeable advice until next January unless something big is happening in your life before then.

If you’ve got other funds in differing risk investments then even a small guaranteed pension can have benefits when you look at the big picture and what risk you feel comfortable with. In my own case I had been a bit spooked by a very big jump in the value of one of my pension funds and I’d realised how volatile private pensions can be.

Does depend on your age though - if you have 20-30 years plus until retirement then you might take a different view as you can look longer term.

Not a pensions person - just relaying one person’s experience. All our circumstances are different.

Re: Defined Benefits Transfer (Pension)

PostPosted:Fri Feb 14, 2020 10:47 pm
by GAFlyer4Fun
Leodisflyer wrote: If it were me I’d hold off getting chargeable advice until next January unless something big is happening in your life before then.


IR35 reform in the private sector will hit in April.... this is life changing for a lot of people where risk averse clients make blanket decisions which will end up with a lot of people closing down their businesses.

Where those businesses have a pensions scheme, there could be a queue for financial advice about what to do with the pension scheme.

.... and another queue for liquidators.

Re: Defined Benefits Transfer (Pension)

PostPosted:Fri Feb 14, 2020 11:13 pm
by Miscellaneous
GrahamB wrote:'Diddly squat' is a bit of a clue!

It surely is in terms of a pension fund, what it will provide and how viewed by IFAs, but as a lump sum it would buy a lot of flying. :wink:

Leodisflyer wrote:All our circumstances are different.

Indeed they are @Leodisflyer, thanks for your reply. It is close to one I may have penned myself.

For interests sake here's the numbers, As hard as I try I cannot think of any scenario where leaving it would be financially beneficial. Can anyone? :D Sadly I think current legislation may be costing many a lot of money! :(

Option 1: £845.76 pa

Option 2: £4763.47 lump sum with £714.60 pa

Option 3: a variation of option 2.

Option 4: transfer £42 994 to a Self Invested Pension Plan (which would give control and flexibility of accessing the whole or any part therof as and when decided by me).

Pension legislation has come a long way in my lifetime, but has a longer way to go.

@GAFlyer4Fun a consideration that could only impact me indirectly. :thumright:

Re: Defined Benefits Transfer (Pension)

PostPosted:Sun Feb 16, 2020 12:30 am
by grow45
Am I right in thinking you are based in Scotland or am I mixing you up with somebody else. If so I have just commissioned Mearns and Co in Edinburgh (http://www.mearnscompany.com) to do a pensions review for me. This was for a SIPP and various defined contribution ones rather than a defined benefit transfer and I am still waiting for their report but have been impressed so far. The cost was not cheap but I felt will be good value for money. May be worth contacting them to see what they could offer you. My contact there was Katrina Ross and she was recommended to me by one of my former colleagues who retired following receipt of their advice.

Re: Defined Benefits Transfer (Pension)

PostPosted:Sun Feb 16, 2020 8:44 am
by Paul_Sengupta
Miscellaneous wrote:Option 1: £845.76 pa

Option 4: transfer £42 994 to a Self Invested Pension Plan


You have 43 grand in the pot and that gives a pension of £845 a year? Without any growth in the meantime, that gives nearly 51 years of payout before breaking even. I can see why you'd want to transfer it out!

Re: Defined Benefits Transfer (Pension)

PostPosted:Sun Feb 16, 2020 8:59 am
by Miscellaneous
Paul_Sengupta wrote:
Miscellaneous wrote:Option 1: £845.76 pa

Option 4: transfer £42 994 to a Self Invested Pension Plan


You have 43 grand in the pot and that gives a pension of £845 a year? Without any growth in the meantime, that gives nearly 51 years of payout before breaking even. I can see why you'd want to transfer it out!

Indeed, it's not exactly rocket science @Paul_Sengupta. I've yet to get someone to agree to give the advice (waiting on call backs etc) and even if I do it is likely to cost a few £K. There are other benefits of course beyond the simple arithmetic. Flexibility and access as required, full balance available with no partial loss of income in event of death...

Just another example of folks being caught up in the attempt to save those not financially astute from themselves. :roll:

It does demonstrate the size of pension pot required to have a decent pension (although this is not strictly a pot). :shock:

Maybe the new govt will see sense and raise the requirement for advice to £50k. :lol:

@grow45 many thanks for your recommendation (you are correct, I am in Scotland). :thumright:

Re: Defined Benefits Transfer (Pension)

PostPosted:Sun Feb 16, 2020 9:40 am
by GrahamB
With those figures, it would appear to be a no brainer, That’s a hell of a commutation rate.

Re: Defined Benefits Transfer (Pension)

PostPosted:Sun Feb 16, 2020 10:07 am
by Miscellaneous
GrahamB wrote:With those figures, it would appear to be a no brainer, That’s a hell of a commutation rate.

Indeed, however legislation is such that I have to pay someone handsomely (one IFA I spoke to yesterday suggested circa £3k) to officially tell me it is a no brainer. If I can't get an IFA to make the desired recommendation and a SIPP provider to accept the transfer (there's no guarantee even with advice) then it's likely to cost me half the transfer value even if I live 25 years in to retirement. The pension does increase at RPI, even so it is still a no brainer. :evil: