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Retirement

ChrisK said:
Anyone thinking of transferring a final salary pension in near future?
with whats going on with the current economy just wondering what valuations are like they were very good a few year back
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I’d think long and hard before you did anything like that, or get professional advice. They keep writing to me offering ever increasing amounts to transfer out of the scheme - my financial advisor rightly pointed out its to their advantage not mine.
 

Unbalanced Views said:
I’d think long and hard before you did anything like that, or get professional advice. They keep writing to me offering ever increasing amounts to transfer out of the scheme - my financial advisor rightly pointed out its to their advantage not mine.
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Mutually beneficial. Some schemes want to reduce their liabilities in the main so they’ll offer better transfer values. Some schemes don’t want anyone to transfer out so they’ll apply a reduction.

Only professional advice can determine whether what a scheme is offering is good for you or not. At the minute typically it’s not. For the last 6 years typically it was - depending of course on individual circumstances (just need to put that important caveat on before it gets jumped on by Gary Gold Plate etc.)
 
Temple of Doom said:
Mutually beneficial. Some schemes want to reduce their liabilities in the main so they’ll offer better transfer values. Some schemes don’t want anyone to transfer out so they’ll apply a reduction.

Only professional advice can determine whether what a scheme is offering is good for you or not. At the minute typically it’s not. For the last 6 years typically it was - depending of course on individual circumstances (just need to put that important caveat on before it gets jumped on by Gary Gold Plate etc.
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It’s a fantastic plan from a huge American company which must be costing them a fortune
 
Unbalanced Views said:
I’ve no idea, why do you ask ? I simply saying if you have final salary pension seek professional advice before doing anything with it - is that some kind of an issue for you ?
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Look at your last reply to me - you mention an American company. I asked nicely as I didn’t understand what you meant. I’ve literally just endorsed taking advice!!
 
Also with DC (pot) pensions drawdown was the main option in recent years but it appears annuity (fixed income) is making a comeback , where you buy an annuity out of your dc pot funds and get a guaranteed income in return - unsure if it’s increased interest rates (or inflation ) that has caused annuity to become a strong option again
 
Temple of Doom said:
They’ve generally fallen by about 30% due to a large increase in gilt yields amongst other things. The golden years for this type of transfer were 2016 to 2022 and it’s unlikely that transfer values will rise back to those levels any time soon - if not ever. Best thing to do is keep an eye on inflation. If that falls - or continues to fall - then there is less pressure on the BoE to to increase interest rates. It’s a similar way to how gilt yields work in simple terms so if they fall then pension transfer values will rise.

Also a few schemes have changed the way they calculate the CETV’s now to increase transfer values available.

The is an index called the XPS index which shows the average transfer value which is calculated every month.
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This is exactly why my CETV on an old pension has dropped about 65% 😞😆
 
Unbalanced Views said:
It’s a fantastic plan from a huge American company which must be costing them a fortune
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Looking at my numbers at present. I have 2 old Final Salary pensions, one belongs to BMW. Transfer value incredible. After taking advice looking to leave it where it is and take a lump sum tax free and an income.

Best to get advice but still all about your circumstances.

Seriously thinking of bailing out this December, still scary mind.
 
One thing that probably won’t affect many, but worth noting, is when the LTA limit was removed, the maximum amount you could take out tax-free remained fixed. So while it was 25% of the previous LTA of £1,073,100, ie £268,275, that is now the maximum amount that can be taken tax-free regardless of how much larger the final pot grows.

Oh for that to be a problem.
 
The said:
This is exactly why my CETV on an old pension has dropped about 65% 😞😆
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At least the main thing is the pension itself is not affected mate. Just the amount they would have given you to transfer out.

CETV’s are irrelevant for people who have no intention of transferring out - unless you get divorced of course!
 
Fletch said:
Also with DC (pot) pensions drawdown was the main option in recent years but it appears annuity (fixed income) is making a comeback , where you buy an annuity out of your dc pot funds and get a guaranteed income in return - unsure if it’s increased interest rates (or inflation ) that has caused annuity to become a strong option again
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Annuity rates have gone up but the risk is still the same if you pop your clogs shortly after retirement, half (only I’d take reduced annuity) or the full lot is gone.

At least with drawdown the full fund can be pot can transferred to your partner/kids tax free providing you die before your 75.
 
Temple of Doom said:
At least the main thing is the pension itself is not affected mate. Just the amount they would have given you to transfer out.

CETV’s are irrelevant for people who have no intention of transferring out - unless you get divorced of course!
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Yeah, still growing little by little on its own each month I suppose.

You seem a bloke in the know. Pensions typically benefit by compound interest but what if your pensions purely buying into somet akin to S&P 500?
 
We’re going through a restructure atm and although my role appears to be safe I’ve checked out my redundancy payout and I’m now in a position where it’s a win either way.

I’m pretty sure I will be made redundant at some point (maybe a few years away) and having that peace of mind is very reassuring heading closer to retirement.

The point being this exact scenario is why I took the job in the first place
 
elder said:
We’re going through a restructure atm and although my role appears to be safe I’ve checked out my redundancy payout and I’m now in a position where it’s a win either way.

I’m pretty sure I will be made redundant at some point (maybe a few years away) and having that peace of mind is very reassuring heading closer to retirement.

The point being this exact scenario is why I took the job in the first place
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My teams been shifted 7 times in 18 months. I’m on borrowed time 😆.
 
The said:
Yeah, still growing little by little on its own each month I suppose.

You seem a bloke in the know. Pensions typically benefit by compound interest but what if your pensions purely buying into somet akin to S&P 500?
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I think the active v passive debate (essentially should you invest with active stock picking managers or funds that just track an index like the S&P 500) is really old hat now and should be yesterdays argument. The main thing is having a solution that aligns with your retirement goal and then working towards that. This could mean retaining your final salary scheme if it meets your objective, looking to potentially transfer it if you require more flexibility than what the scheme offers and then manage the money yourself or with the assistance of an adviser. It’s whatever is going to work best for you and everyone is different.
 
I know this is a thread about the financial side of retirement and what I’m about to say is slightly off topic.



You come across people on here who are only 30-40- early 50 etc and are chomping at the bit to retire. Why the hell would you wish your life away like that ? By the time your of retirement age your life won’t be as it is now. You’ll not be as fit, people very close to you have a good chance to have passed away and lastly for blokes like me it’s “THE END” so to speak and the Boredom will be a killer, especially in the winter. The sense of having very little purpose will be hard to deal with.


Yes if your cannon fodder who works in a factory or some midblowingly boring job I get it a little, however wishing you where closer to death just so you don’t have to work is pretty tragic.

Your 30’s, 40’s and early 50’s are the prime of your working life, if works that bad try and change what you do or grow up a bit and embrace it.
 
Gillythedilf said:
I know this is a thread about the financial side of retirement and what I’m about to say is slightly off topic.



You come across people on here who are only 30-40- early 50 etc and are chomping at the bit to retire. Why the hell would you wish your life away like that ? By the time your of retirement age your life won’t be as it is now. You’ll not be as fit, people very close to you have a good chance to have passed away and lastly for blokes like me it’s “THE END” so to speak and the Boredom will be a killer, especially in the winter. The sense of having very little purpose will be hard to deal with.


Yes if your cannon fodder who works in a factory or some midblowingly boring job I get it a little, however wishing you where closer to death just so you don’t have to work is pretty tragic.

Your 30’s, 40’s and early 50’s are the prime of your working life, if works that bad try and change what you do or grow up a bit and embrace it.
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On this subject you go on like SBC.
You're looking at it from the wrong angle. People aren't wishing their lives away at all, quite the opposite. It's not about actively wanting to be old & close to death, it's about being financially independent at the earliest opportunity to get out the rat race. And not being as fit as you were is the exact reason you should do it if you can.
You really must have so little going on in your life outside of work if you think you'll die of boredom. I reckon I've got several years worth of stuff to keep me busy that I currently just don't have the time as work gets in the way.
 
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