Transferring £30k+ D.B. Pension to SIPP, Any Way to Avoid Ma
Discussion
Hi all
I’m 34 years old and have *just* over £30k (£30,313 to be exact) in a Defined Benefit pension with a company I worked for when I was very young.
I have now moved up the career ladder and on to other companies and have two other pensions running, so three in total. One is with my current employer and on from my previous (middle) employer.
I am a confident, knowledgeable amateur investor, and I invest a reasonable size portfolio on my own, with results that I’m happy with. I’ve been doing this for a while and have a huge interest in it and know the risks associated with taking control of my own investments.
I would like to transfer the money out of my first pension to a SIPP, in order that I have control over where the £30k is invested. However, as it is just over the £30k threshold, I’m being told I need to consult an IFA for a full review and formal documented advice. It appears this may cost in the region of £1,000 to £2,000, which I feel is unreasonable due to the small amount in question, the fact that it is only ~£300 over the threshold, and the fact that I am going to disregard the advice and go with a SIPP anyway, as I’m fully aware of all the consequences.
My questions are:
Is there any way to get round this?
Would it be possible to only transfer £29,999 and request them to give the remaining £314 to charity?
Could I transfer £29,999 and leave £314 in the initial pension fund?
Is there a way to obtain this financial advice any more cheaply, on a ‘fast-track’ basis?
It seems that the charges for financial advice will be out of proportion to the amount in question. Any suggestions would be gratefully received.
I’m 34 years old and have *just* over £30k (£30,313 to be exact) in a Defined Benefit pension with a company I worked for when I was very young.
I have now moved up the career ladder and on to other companies and have two other pensions running, so three in total. One is with my current employer and on from my previous (middle) employer.
I am a confident, knowledgeable amateur investor, and I invest a reasonable size portfolio on my own, with results that I’m happy with. I’ve been doing this for a while and have a huge interest in it and know the risks associated with taking control of my own investments.
I would like to transfer the money out of my first pension to a SIPP, in order that I have control over where the £30k is invested. However, as it is just over the £30k threshold, I’m being told I need to consult an IFA for a full review and formal documented advice. It appears this may cost in the region of £1,000 to £2,000, which I feel is unreasonable due to the small amount in question, the fact that it is only ~£300 over the threshold, and the fact that I am going to disregard the advice and go with a SIPP anyway, as I’m fully aware of all the consequences.
My questions are:
Is there any way to get round this?
Would it be possible to only transfer £29,999 and request them to give the remaining £314 to charity?
Could I transfer £29,999 and leave £314 in the initial pension fund?
Is there a way to obtain this financial advice any more cheaply, on a ‘fast-track’ basis?
It seems that the charges for financial advice will be out of proportion to the amount in question. Any suggestions would be gratefully received.
I am leaving my two other pensions to remain as managed pensions which I will have no input towards. It is only the £30k from the first one that I am talking about.
We are only talking about whether I receive the equivalent of £3,000 to £4,000 one off lump sum and then £10 a week when I retire, or don't receive that. So in the grand scheme of things I don't think it's a huge risk...
I would be happy to just transfer the £29,999, I just didn't know whether it would be possible or whether anyone else had any experience of doing something similar.
We are only talking about whether I receive the equivalent of £3,000 to £4,000 one off lump sum and then £10 a week when I retire, or don't receive that. So in the grand scheme of things I don't think it's a huge risk...
I would be happy to just transfer the £29,999, I just didn't know whether it would be possible or whether anyone else had any experience of doing something similar.
Most DB schemes wont allow a partial transfer (its all or nothing).
When was the calculation date for CETV? If it was a few months ago, you might want to ask for a requote as the values change all the time and it could now be lower than £30k.
They may charge for the requote alternatively sit tight for 12 months and then ask for another one - you should get it for free. No idea what the CETV will be in 12 months though!
When was the calculation date for CETV? If it was a few months ago, you might want to ask for a requote as the values change all the time and it could now be lower than £30k.
They may charge for the requote alternatively sit tight for 12 months and then ask for another one - you should get it for free. No idea what the CETV will be in 12 months though!
If gilt yields rise between now and when you next receive a Cash Equivelant Transfer Value that could result in a decreased transfer value taking you under the £30k threshold.
However, the deferred benefits will be index linked and so will likely have yearly percentage increase apply.
The reason to the advice requirement is that Defined Benefit pension transfers are a minefield and while you may feel confident in your decision at this point, there may well be extra benefits and guarantees that you are not aware of at this point that would be lost upon transfer.
Decent advice from a decent IFA will pay for itself in the long run, even if it's a decision you feel you could have made on your own.
However, the deferred benefits will be index linked and so will likely have yearly percentage increase apply.
The reason to the advice requirement is that Defined Benefit pension transfers are a minefield and while you may feel confident in your decision at this point, there may well be extra benefits and guarantees that you are not aware of at this point that would be lost upon transfer.
Decent advice from a decent IFA will pay for itself in the long run, even if it's a decision you feel you could have made on your own.
I don't know who is telling you you need a full IFA review, but they are wrong.
You can transfer any amount you like from a DB scheme to a SIPP - there is no requirement whatsoever to pay for advice when doing so.
Have a look at Youinvest from AJ Bell or Clubfinance Frequent Trader (if you are looking to make a lot of trades).
That said, there are sometimes advantages of seeking advice, but if you don't believe this is the case with this pension you have no obligation to do so. You have been wrongly informed basically.
You can transfer any amount you like from a DB scheme to a SIPP - there is no requirement whatsoever to pay for advice when doing so.
Have a look at Youinvest from AJ Bell or Clubfinance Frequent Trader (if you are looking to make a lot of trades).
That said, there are sometimes advantages of seeking advice, but if you don't believe this is the case with this pension you have no obligation to do so. You have been wrongly informed basically.
JulianPH said:
You can transfer any amount you like from a DB scheme to a SIPP - there is no requirement whatsoever to pay for advice when doing so.
You are wrong.If the TV is over £30,000 and to a pension arrangement that permits flexi-access, then it is a legal requirement to seek financial advice before doing so. Whoever proves the advice must be regulated by the FCA and possess the appropriate authorisation. I am not aware of anyone that will do so without charge.
M3Driver said:
Hi all
I’m 34 years old and have *just* over £30k (£30,313 to be exact) in a Defined Benefit pension with a company I worked for when I was very young.
I have now moved up the career ladder and on to other companies and have two other pensions running, so three in total. One is with my current employer and on from my previous (middle) employer.
I am a confident, knowledgeable amateur investor, and I invest a reasonable size portfolio on my own, with results that I’m happy with. I’ve been doing this for a while and have a huge interest in it and know the risks associated with taking control of my own investments.
I would like to transfer the money out of my first pension to a SIPP, in order that I have control over where the £30k is invested. However, as it is just over the £30k threshold, I’m being told I need to consult an IFA for a full review and formal documented advice. It appears this may cost in the region of £1,000 to £2,000, which I feel is unreasonable due to the small amount in question, the fact that it is only ~£300 over the threshold, and the fact that I am going to disregard the advice and go with a SIPP anyway, as I’m fully aware of all the consequences.
My questions are:
Is there any way to get round this?
Would it be possible to only transfer £29,999 and request them to give the remaining £314 to charity?
Could I transfer £29,999 and leave £314 in the initial pension fund?
Is there a way to obtain this financial advice any more cheaply, on a ‘fast-track’ basis?
It seems that the charges for financial advice will be out of proportion to the amount in question. Any suggestions would be gratefully received.
You could wait for gilt yields to continue to recover, although when they did do towards the end of the year, transfer values didn't drop by much. That recovery in gilt yields is continuing and if it does do, and if we see low inflation, your transfer value may drop by just enough for you to proceed with the need for advice. A lot too, will depend on how badly your trustee will want to shed liability.I’m 34 years old and have *just* over £30k (£30,313 to be exact) in a Defined Benefit pension with a company I worked for when I was very young.
I have now moved up the career ladder and on to other companies and have two other pensions running, so three in total. One is with my current employer and on from my previous (middle) employer.
I am a confident, knowledgeable amateur investor, and I invest a reasonable size portfolio on my own, with results that I’m happy with. I’ve been doing this for a while and have a huge interest in it and know the risks associated with taking control of my own investments.
I would like to transfer the money out of my first pension to a SIPP, in order that I have control over where the £30k is invested. However, as it is just over the £30k threshold, I’m being told I need to consult an IFA for a full review and formal documented advice. It appears this may cost in the region of £1,000 to £2,000, which I feel is unreasonable due to the small amount in question, the fact that it is only ~£300 over the threshold, and the fact that I am going to disregard the advice and go with a SIPP anyway, as I’m fully aware of all the consequences.
My questions are:
Is there any way to get round this?
Would it be possible to only transfer £29,999 and request them to give the remaining £314 to charity?
Could I transfer £29,999 and leave £314 in the initial pension fund?
Is there a way to obtain this financial advice any more cheaply, on a ‘fast-track’ basis?
It seems that the charges for financial advice will be out of proportion to the amount in question. Any suggestions would be gratefully received.
I can think of just one SIPP provider who will take a transfer that is accompanied with a personal recommendation that advises against transferring. I could be wrong.
PurpleMoonlight said:
JulianPH said:
You can transfer any amount you like from a DB scheme to a SIPP - there is no requirement whatsoever to pay for advice when doing so.
You are wrong.If the TV is over £30,000 and to a pension arrangement that permits flexi-access, then it is a legal requirement to seek financial advice before doing so. Whoever proves the advice must be regulated by the FCA and possess the appropriate authorisation. I am not aware of anyone that will do so without charge.
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