I have an old scottish mutual paid up section 226 policy.
It has a current transfer value of 22,000. In 13 years time (when I'm 60) - assuming there are no further bonus and there is no final bonus this will have a value of 41000. Because of the guaranteed annuity rate this 41k will produce a pension of 4,000.
At age 60 in order to produce this pension with an annuity rate of 6.7% I would need a fund of 59k on the open market. This would imply a compound growth rate of 7.75%.
If the current final bonus rates are maintained - by no means certain - then the value will be 63000 producing a pension just over 6000.
This would need a fund of about 90k - or a compound growth rate of 11.5%.
It therefore seems to me that there can be no reasonable reason why I might transfer - but have I missed anything ?
It has a current transfer value of 22,000. In 13 years time (when I'm 60) - assuming there are no further bonus and there is no final bonus this will have a value of 41000. Because of the guaranteed annuity rate this 41k will produce a pension of 4,000.
At age 60 in order to produce this pension with an annuity rate of 6.7% I would need a fund of 59k on the open market. This would imply a compound growth rate of 7.75%.
If the current final bonus rates are maintained - by no means certain - then the value will be 63000 producing a pension just over 6000.
This would need a fund of about 90k - or a compound growth rate of 11.5%.
It therefore seems to me that there can be no reasonable reason why I might transfer - but have I missed anything ?
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