Retirement

[WHD]

A financial adviser is there to give you advice that best meets your needs. Not take instructions as that is what is known as 'execution only' where no advice is given. You can't transfer a final salary pension without advice from a qualified transfer specialist financial adviser.

You've simply quoted what the cash equivalent transfer value was eg £150k. You've assumed if it had gone in a particular fund it would have increased 25%. What if as @42 has said, you'd put it in a fund high in bonds and your £150k was now worth £100k? Would that be 'duff advice'? Hind sight is great.

I would have put it in my other pension, which I know has increased in value. I hear what you are saying and I wouldn't have expected the advisor to predict the pandemic, but surely they would have known something catastrophic like that could decrease the transfer value massively. The pandemic did not have the same impact on my DC pension long term, as it has recovered.

You haven't mentioned what the final salary pension was per annum at your intended retirement age? I've no doubt that will be a lot higher now with the guaranteed inflationary increases that have happened since the time of advice.

At current rates, it's around £4.5k a year. Back in 2018 I had worked out I'd need to live to 105 to get the full £152k they were offering, and looking back I can't believe I let him talk me out of it. He made it seem the DC pot was the one that could lose a third of it's value, not the DB one.

How much did you pay for the advice? Was it documented? Was there a full advice process followed?

Nothing. Tbf, he said he could easily sign the forms and take his 5% of whatever, but he wanted to give me good advice, not just take his cash.

 

[Brother Lee]

I get that it looks that way but there'll have been a lot more detailed calculations factoring in the inflationary increases to your normal retirement age. Your marital status, dependant kids, years to retirement rather than just I need to live to 105.

With the way inflation has been the last few years and gilt yields a lot higher, they now don't need to offer as much but you'll have benefited from inflationary increases on the actual pension income.

For me it sounds like he looked after you rather than gave duff advice but that's just my opinion.

The DB scheme on top of your current projected state pension is going to give you around £16k in today's terms. These will both keep pace with inflation so it's a nice start. Then you've got your DC scheme to top it up with drawdown or fund early retirement in the build up.

I think you're in a nice position there with that foundation income. If we live to the state and normal retirement date of the DC scheme of course.

 

[The]

I went to the financial advisor fully intending to transfer my pension into my other pot. That pot has grown over that time, not lost a third.
If the financial advisor had done what I wanted and not talked me out of it, I'd have about £100k extra in my pot.
That seems like duff advice to me. What's the point of a financial advisor if not to mitigate for unseen circumstances?

Famous last words like, but if you can hang on for a few year the yields should hopefully go back to what they were. About 2/3 year ago I wanted to transfer an old DC person that had a DC transfer out value of 47k with only 28k in it. My mate, a FA advised not to and to look at it later nearer retirement. Same things happened. DC transfer out is about 22k now with 31k in it and my current DC pension is currently on its way to the moon (just put the kiss of death on it).

 

[WHD]

The DB scheme on top of your current projected state pension is going to give you around £16k in today's terms. These will both keep pace with inflation so it's a nice start. Then you've got your DC scheme to top it up with drawdown or fund early retirement in the build up.

Actually, the statement gives the £4.5k figure as "Total deferred pension at date of leaving" and I left it in 2004. I can't work out if that was what I would get if I could claim it in 2004, and in today's figures it would be higher. If it is, I'd be a bit happier

 

[TAD]

Actually, the statement gives the £4.5k figure as "Total deferred pension at date of leaving" and I left it in 2004. I can't work out if that was what I would get if I could claim it in 2004, and in today's figures it would be higher. If it is, I'd be a bit happier

All my defined benefit pensions are index linked/linked to inflation. Those I don't get an annual statement for I write to every 5 years asking for a valuation.

 

[Matt Hopkins]

Actually, the statement gives the £4.5k figure as "Total deferred pension at date of leaving" and I left it in 2004. I can't work out if that was what I would get if I could claim it in 2004, and in today's figures it would be higher. If it is, I'd be a bit happier

Be worth around £7.5-£8k if your 65 now at a guess

 

[Fletch]

It’s pretty rare they agree to transfer now, that ship may have sailed (or whatever the saying is )

 

[WHD]

Be worth around £7.5-£8k if your 65 now at a guess

I'm "only" 50, but I'd love to retire at 57.

 

[timeforheroes1]

I'm "only" 50, but I'd love to retire at 57.

Who was the provider ( sorry if already answered this). One of my clients had an old deffered LGPS scheme 9k at 65 and been offered 245k and is moving it out. She’s early 50s doesn’t need the income etc so pretty solid rationale but the LGPS values are only ones which have held steady/increased in some cases

 

[WHD]

Who was the provider ( sorry if already answered this). One of my clients had an old deffered LGPS scheme 9k at 65 and been offered 245k and is moving it out. She’s early 50s doesn’t need the income etc so pretty solid rationale but the LGPS values are only ones which have held steady/increased in some cases

It was a company scheme.

 

[timeforheroes1]

It was a company scheme.

Ah right , was going to say it had been LGPS would have been worth asking again so see what they came back with

 

[archiesdad]

I just got some figures for a final salary pension I paid into for around 2 years in the late 80s. I actually forgot I had it as it went into admin ages ago and had to be protected. Was amazed what it's worth v what I paid in. 25k lump and 100 quid a week for life, was over the moon

 

[Fletch]

I just got some figures for a final salary pension I paid into for around 2 years in the late 80s. I actually forgot I had it as it went into admin ages ago and had to be protected. Was amazed what it's worth v what I paid in. 25k lump and 100 quid a week for life, was over the moon

Great stuff , you may have option to take a larger element as lump sum Or to sacrifice the lump sum and take more as guaranteed weekly income , depending which you prefer . Whatever that’s great news for you

 

[Darlo1973]

I just got some figures for a final salary pension I paid into for around 2 years in the late 80s. I actually forgot I had it as it went into admin ages ago and had to be protected. Was amazed what it's worth v what I paid in. 25k lump and 100 quid a week for life, was over the moon

That's your beer money sorted for life!

Just shows the value of tracking down old pension schemes which you may have forgotten about especially if you have moved several times and they don't have your current address.

 

[archiesdad]

Great stuff , you may have option to take a larger element as lump sum Or to sacrifice the lump sum and take more as guaranteed weekly income , depending which you prefer . Whatever that’s great news for you

Yes there were two options, the other was around 30k and about 75 quid a week. It's got zero transfer value, that part was the main reason I posted as there was some debate earlier in the thread ref transferring a FS scheme, don't do it would be my uneducated advice.

That's your beer money sorted for life!

Just shows the value of tracking down old pension schemes which you may have forgotten about especially if you have moved several times and they don't have your current address.

Exactly this, I had 2 that I had to start from scratch with. This one and an oldprivate one I started with the pru when I was like 18, again it lasted like 2 or 3 years. It's not worth much so I transfered it as a housekeeping thing.

 

[Darlo1973]

I'm "only" 50, but I'd love to retire at 57.

57 is my target too (5 years and 1 month to go). Maybe not to retire forever but certainly to quit the corporate day job, take some time out to do some travelling and then maybe do something part-time for a few years to make some beer money so that I don't have to draw down the pension fund too much.

Trouble is working out how much money is "enough". Don't want to be counting the pennies too much but neither is there any point in keep working when you can afford to retire comfortably.

 

[WHD]

57 is my target too (5 years and 1 month to go). Maybe not to retire forever but certainly to quit the corporate day job, take some time out to do some travelling and then maybe do something part-time for a few years to make some beer money so that I don't have to draw down the pension fund too much.

Trouble is working out how much money is "enough". Don't want to be counting the pennies too much but neither is there any point in keep working when you can afford to retire comfortably.

I'm thinking maybe a pot of 7 times my salary to take me up to almost 65 when I can get my DB pension. My DC pension is currently worth just over 3 times my salary and I think it could get to 7 times by the time I'm 57, as long as another pandemic or a Liz Truss doesn't happen.

 

[Darlo1973]

I'm thinking maybe a pot of 7 times my salary to take me up to almost 65 when I can get my DB pension. My DC pension is currently worth just over 3 times my salary and I think it could get to 7 times by the time I'm 57, as long as another pandemic or a Liz Truss doesn't happen.

Hmm - that's an interesting metric which I hadn't thought of. A quick back of an envelope calc across my DC schemes shows that I'm currently at about 5x in pensions plus another 1x in cash/shares savings and without counting property equity. Unfortunately I've never had a job with a DB pension so I would need to have a higher DC pool.

The last 6 months have had some decent growth in the funds but, as you point out, you never know what (or who) is around the corner.

I still haven't got my head around all of the rules about drawdowns but I still have a few years to work it out. I'm also one of those born between April 71 and Apri 73 who gets caught by the transition to 57 for access to the funds.

 

[Select coaches]

Hmm - that's an interesting metric which I hadn't thought of. A quick back of an envelope calc across my DC schemes shows that I'm currently at about 5x in pensions plus another 1x in cash/shares savings and without counting property equity. Unfortunately I've never had a job with a DB pension so I would need to have a higher DC pool.

The last 6 months have had some decent growth in the funds but, as you point out, you never know what (or who) is around the corner.

I still haven't got my head around all of the rules about drawdowns but I still have a few years to work it out. I'm also one of those born between April 71 and Apri 73 who gets caught by the transition to 57 for access to the funds.

Can you explain this to me, I’m right at the end of this period.

 

[WHD]

Hmm - that's an interesting metric which I hadn't thought of. A quick back of an envelope calc across my DC schemes shows that I'm currently at about 5x in pensions plus another 1x in cash/shares savings and without counting property equity. Unfortunately I've never had a job with a DB pension so I would need to have a higher DC pool.

The last 6 months have had some decent growth in the funds but, as you point out, you never know what (or who) is around the corner.

I still haven't got my head around all of the rules about drawdowns but I still have a few years to work it out. I'm also one of those born between April 71 and Apri 73 who gets caught by the transition to 57 for access to the funds.

Also, I'm working that out as total salary, but I currently pay 20% of that into my pension. There's also NI that I won't be paying, so there's a possibility a bit less would do.