Transferring Defined Benefit pension
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    Quote Originally Posted by TestMangler View Post

    139K would give him a reasonable number of years at 3.6K per annum from age 54 even without adding to it or growing it. Transferring a defined pension is not always a great idea, but it's also not always a bad one. Depends on individual circumstances.
    This is very true but also the reason why the OP probably ought to seek an IFA. There are some good deals for selling DB pots and some terrible ones. An IFA should know the market and if you pay them a fixed fee for advice and there's no selling commission then they are independant.

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    If you are considering this you have two routes to go down in my opinion:
    • find an IFA that will just do the necessary letter to enact the transfer i.e. the cheap and cheerful route. I would imagine this to cost about 300-500+VAT and you probably won't get any advice with this;
    • find a decent IFA who will actually do things properly and give you the advice you need on this, I would imagine you'd pay in the region of 1,200 - 1,500+VAT for this as there is so much work involved to do this properly.

    I have a very good friend that is an IFA (one I'd trust with my investments) and this is generally something he avoids at all costs because it just isn't worth it. The potential risk for mis-selling and being sued for bad advice etc. is (in his opinion) huge in this area and could see it being the next big 'PPI type' claim area. If you are advised to transfer the money out then who ever gives you the advice (if they are registered and regulated etc.) can have a lifetime liability against that advice so they need to hold very good PII!

    I'm not a financial advisor and the above shouldn't be construed as any form of financial advice in any form.

    Martin
    Contratax Ltd

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    Quote Originally Posted by ContrataxLtd View Post
    If you are considering this you have two routes to go down in my opinion:
    • find an IFA that will just do the necessary letter to enact the transfer i.e. the cheap and cheerful route. I would imagine this to cost about 300-500+VAT and you probably won't get any advice with this;
    • find a decent IFA who will actually do things properly and give you the advice you need on this, I would imagine you'd pay in the region of 1,200 - 1,500+VAT for this as there is so much work involved to do this properly.

    I have a very good friend that is an IFA (one I'd trust with my investments) and this is generally something he avoids at all costs because it just isn't worth it. The potential risk for mis-selling and being sued for bad advice etc. is (in his opinion) huge in this area and could see it being the next big 'PPI type' claim area. If you are advised to transfer the money out then who ever gives you the advice (if they are registered and regulated etc.) can have a lifetime liability against that advice so they need to hold very good PII!

    I'm not a financial advisor and the above shouldn't be construed as any form of financial advice in any form.

    Martin
    Contratax Ltd
    I paid 2K plus VAT. I was looking at a payout well in excess of 500K, so it was worth it, even though I'm not entirely clueless on what I was doing.

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    Just got a transfer value from my Lloyds DB scheme. Was surprised at the amount....26 years worth. Lloyds are being quite generous as they want as many ex-employees out of the original DB schemes as possible.

    I'm not going to move it, as I'm cautious in that respect.

    My mate who is an IFA, said his company only tend to advise under certain criteria, e.g. It's over x thousand and it's not your only retirement planning fund. I failed on the second point. But that's not to say other IFAs wouldn't advise.

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    The transfer offer to the OP is almost 37x the benefit. In my opinion, a figure like that is well worth looking at transferring. Whilst I share SueEllen's caution to some extent, there are circumstances where the transfer of a benefit at around 37x is worth doing. It also depends a great deal on the OP's circumstances of course.

    The problems that the OP faces are -

    Finding an IFA that will even consider doing this.
    Finding an IFA that would recommend a transfer.
    Given a "transfer out not advisable" outcome - Finding a SIPP provider who will still accept the transfer in as a "persistant client".

    If the OP can overcome the above problems, then it may be worthwhile. For example - Invest the GBP 139,000 into something boring like City of London investment trust - It has a 50 year record of increasing dividends EVERY year. At the current yield on that trust the OP would have an income of more than GBP 4.5k a year WITHOUT touching any capital. The income SHOULD increase every year and the capital SHOULD grow too. Just a suggestion..............

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    Quote Originally Posted by WordIsBond View Post
    I paid 2K plus VAT. I was looking at a payout well in excess of 500K, so it was worth it, even though I'm not entirely clueless on what I was doing.
    Seems reasonable to me, generally the bigger pot the bigger the fee (to an extent) and when we are looking at large sums of money paying for decent advice is generally worth it in the long run.

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    I am just starting to look at this for my wife's defined benefit pension but am struggling to find an advisor who will just provide the advice without requiring you (if the outcome of the advice was to transfer) to use their platform to reinvest the money.

    I would want to use an Interactive Investor (or similar) SIPP instead

    Do any of you have recommendations of an IFA who will just provide the advice (for an appropriate fee) ?

    Also, OP can I ask what age you are to have gotten such a high multiple ?

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    Quote Originally Posted by zoomfwd View Post
    Do any of you have recommendations of an IFA who will just provide the advice (for an appropriate fee) ?
    That in one (snipped) sentence is now the problem. We all have the new pension freedoms we can exercise. But exercising those freedoms is extremely difficult after the miss-selling of private pensions back in the 80's and the expensive scandal that followed. I have personal experience of that.

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    Thanks for the answers so far.

    Quote Originally Posted by Fred Bloggs View Post
    That in one (snipped) sentence is now the problem. We all have the new pension freedoms we can exercise. But exercising those freedoms is extremely difficult after the miss-selling of private pensions back in the 80's and the expensive scandal that followed. I have personal experience of that.
    I think this may well be a big barrier for me as I'm not that old (33). I would guess they're far more likely to advise to do it if you're near retirement age.

  10. #20

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    Quote Originally Posted by FrontEnder View Post
    Thanks for the answers so far.



    I think this may well be a big barrier for me as I'm not that old (33). I would guess they're far more likely to advise to do it if you're near retirement age.
    If you mange to pull this one off I'm all ears about how you did it. With 25 years left to retirement even in a boring vanilla fund like I suggested, you'd likely be miles ahead than with your DB pension. All things being equal etc..... (Which they aren't of course).

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