Pension advice

[koolpc]

Been told i have to seek Financial advice and get a letter from advisor saying they have advised me as i want to transfer my pension pot from my old Uni one to another so that it is more flexible.

Anyone transferred and been hit by big costs?

I want to transfer to another Pension provider i am with.

I have emailed a few FA's. Waiting for them to reply.

 

[moon man]

i have afew pots i need to sort out ,the first fa i spoke to said do it myself as the 55k amount wasnt worth him doing it ,got afew more that are on the pensionwise website approved list i might ring as i dont really feel confident doing it myself ,im thinking may cost me 1.5 percent of pot but tbh pretty clueless about pensions

 

[The_Abyss]

A few points / questions.

If you’ve been told to take advice then you’re probably in one of the USS final salary schemes. You would need to take advice for that - it’ll be expensive and there are an increasingly dwindling number of advisers able or willing to do this for you right now. This is because the regulator is cracking down on these kind of pension transfers, and reiterates that the first presumption for this kind of transfer is that it will deliver a bad outcome for the client. It is also because the PI insurers for advisers can see a mountain of future claims down the line and have restricted their future cover.

Why do you want to transfer, is the obvious question?

 

[SexyGreyFox]

I took one of my pensions last year and before I took it I had to speak to a manager who by law had to explain the different pensions and the different risks involved.
It would also be recorded so there would be no comeback of me saying "You never told me that".
On the day I just said "I've seen my figures and I want a lump sum and pension" but he said by law he had to take me through everything.

Option 1: Pension for life with two thirds to the wife if I die (zero risk)
Option 2: Lump sum and reduced pension for life with two thirds to the wife if I die (zero risk)
Option 3: Transfer to another company (Big risk) They could arrange the transfer but would charge x amount and I could end up getting a lot less but could get more. Either way I didn't want to gamble.

 

[koolpc]

A few points / questions.

If you’ve been told to take advice then you’re probably in one of the USS final salary schemes. You would need to take advice for that - it’ll be expensive and there are an increasingly dwindling number of advisers able or willing to do this for you right now. This is because the regulator is cracking down on these kind of pension transfers, and reiterates that the first presumption for this kind of transfer is that it will deliver a bad outcome for the client. It is also because the PI insurers for advisers can see a mountain of future claims down the line and have restricted their future cover.

Why do you want to transfer, is the obvious question?

The amount in there would only give me a small pension and or a tax free lump sum. I would much rather transfer it so that i could then take from it as and when needed. I agree that it looks like advice may be expensive and one company said they couldnt give advice as of yet due to waiting on further info about these pensions etc.

I may end up leaving it where it is and taking the cash free lump sum in the future with an annuity.

 

[squawkBOX]

Unless you have a terminal illness or expect to have a very short life, there are very few instances where it makes sense to change from a DB scheme like the USS to a DC scheme.

You are giving up index linked, guaranteed pension, with benefits, for a lump sum. I would highly recommend against it, unless you can argue robustly as to why it makes sense.

As others have mentioned, you will increasingly find it extremely difficult to get a financial advisor to sign off on this, as it is not the best course of action for most people.

Is it the USS? If so it isn't a small pension or a tax free lump sum, it will be a small pension AND a tax free lump sum.

 

[koolpc]

Unless you have a terminal illness or expect to have a very short life, there are very few instances where it makes sense to change from a DB scheme like the USS to a DC scheme.

You are giving up index linked, guaranteed pension, with benefits, for a lump sum. I would highly recommend against it, unless you can argue robustly as to why it makes sense.

As others have mentioned, you will increasingly find it extremely difficult to get a financial advisor to sign off on this, as it is not the best course of action for most people.

Is it the USS? If so it isn't a small pension or a tax free lump sum, it will be a small pension AND a tax free lump sum.

Its a University pension. I left the job approx 12 years ago.

3 options i have according to the company.

Take yearly pension, no lump sum
Take reduced yearly pension and 25% tax free lump

Transfer whole pot

Or, i could leave it alone and take pension from it at a later date i suppose. The tax free lump would come in handy right now though

 

[Hagar]

I had two workplace pensions, from 1981 to 2007 a DB scheme which returns me a salary related pension. The next pension from 2007 until I retired 2017 I converted to an annuity not linked to inflation and 100% on me and my wifes life. It was about an 80k pot and I looked at taking the 25% lump sum but it reduced the monthly payment significantly. The way my tax works out, I only pay a couple of quid on this annuity anyway the bulk coming from the DB scheme.

You need to look at your likely incomes in retirement and I can not advise you except on my own position but check costs and fees carefully before making any moves.

 

[randomshenans]

Personally, I'd leave it there and forget about it. You'll welcome it when you retire and get an extra amount coming in. I still have a pension from when I did a very short spell at the Police (in IT), it's like ~100 a month, but on retirement that'll be nice. Wife has an NHS one from her 6yr spell there, just keeping all details and draw it later. Taking it now when you think you would like it vs. when you're retired with no income, seems like a rash decision.

 

[koolpc]

I agree guys. Leave it alone. At least for the forseeable. Ta

 

[singularity]

Yeah leave it alone,

 

[theone8181]

On the subject of pensions, I've got a final salary pot that's worth about 29,000. I was made redundant and I have another pot where I work that's currently worth about 45,000. I'm 33 and I plan to retire at 55, to do this I'm steadily increasing my contributions (I'm sad and did it in Excel). My question is that is it worth moving my final salary pot into my current one that is not final salary? I won't be doing anything with consulting someone, but I wondered if it was even going that far?

Cheers

Chris

 

[SexyGreyFox]

On the subject of pensions, I've got a final salary pot that's worth about 29,000. I was made redundant and I have another pot where I work that's currently worth about 45,000. I'm 33 and I plan to retire at 55, to do this I'm steadily increasing my contributions (I'm sad and did it in Excel). My question is that is it worth moving my final salary pot into my current one that is not final salary? I won't be doing anything with consulting someone, but I wondered if it was even going that far?

Cheers

Chris

Pretty sure adding them both together won't be beneficial but transferring is a risk.
Leave it where it is.

 

[Destination]

On the subject of pensions, I've got a final salary pot that's worth about 29,000. I was made redundant and I have another pot where I work that's currently worth about 45,000. I'm 33 and I plan to retire at 55, to do this I'm steadily increasing my contributions (I'm sad and did it in Excel). My question is that is it worth moving my final salary pot into my current one that is not final salary? I won't be doing anything with consulting someone, but I wondered if it was even going that far?

Cheers

Chris

Is the 'pot' worth 29k, or is your final salary worth 29k for that portion of your career?

 

[booyaka]

You won't get an IFA to just "give you a letter" to allow you to transfer. That's just not going to happen. (advice is required if the CETV is over £30k on DB schemes)

As @The_Abyss says - DB transfers are about as high risk/ Regulator "hot potato" as you get at the moment. The whole thing is in turmoil at present.

Regulators starting point is generally leave it alone unless you have very strong reasons for moving it.

FCA/PI insurers have killed this market over the last 12-18 months. Trust me I know. The amount of firms/adviser in this field has literally shrunk to nothing as firms/advisers just aren't willing to take the risk that some client complains 20 years from now and they are on the hook for the advice.

 

[Terminal_Boy]

What are the yearly maintenance fees for leaving your pension/s where they are, OP?

 

[SexyGreyFox]

FCA/PI insurers have killed this market over the last 12-18 months. Trust me I know. The amount of firms/adviser in this field has literally shrunk to nothing as firms/advisers just aren't willing to take the risk that some client complains 20 years from now and they are on the hook for the advice.

and those that do have to arrange a phone meeting (or in person) so they can explain every angle and record it so that you can't come back and say they didn't tell you.

 

[booyaka]

What are the yearly maintenance fees for leaving your pension/s where they are, OP?

it's in a DB scheme so their won't be specific cost or fees. Nothing tangible anyway.

 

[theone8181]

If that's directed at me I'm not sure TBH. It's only a 29k pot, I wish It was thatuch salary for 9 years worth of contributions.