Final Salary - worth transferring ?
Discussion
Must be hitting forty that means I'm now thinking more about pensions than I ever did.
I currently have 9 years of accrued Final Salary pension from my prEvious employer, and a reasonably generous pension contribution from my current employer. Is there any benefit in transferring my benefits from the final salary scheme to my personal pension.. A friend mentioned I may get a good transfer value due to price of gilts etc?!
How do I work out what would be good or not? Any advice appreciated
I currently have 9 years of accrued Final Salary pension from my prEvious employer, and a reasonably generous pension contribution from my current employer. Is there any benefit in transferring my benefits from the final salary scheme to my personal pension.. A friend mentioned I may get a good transfer value due to price of gilts etc?!
How do I work out what would be good or not? Any advice appreciated
As a general rule of thumb, don't.
You take on the costs of ongoing management, there's the cost to transfer, generally not cheap and you also take on the risk rather than having an effective guarantee from the employer. There may well be some death benefits in addition etc etc.
There may be reasons to transfer, but you need very, very good advice around this and generally these are few and far between in my opinion.
Beware very wary of fee hungry advisors on this.
You take on the costs of ongoing management, there's the cost to transfer, generally not cheap and you also take on the risk rather than having an effective guarantee from the employer. There may well be some death benefits in addition etc etc.
There may be reasons to transfer, but you need very, very good advice around this and generally these are few and far between in my opinion.
Beware very wary of fee hungry advisors on this.
This is an interesting one for me too because I'll be looking at similar soon...
Essentially, Mrs R has a DB pension that kicks in around 2025. She's just turned 50 and the last transfer value (early 2015) was £200k+. Casually looking at annuity figures suggest she could get more than the defined benefit and 5 years earlier.
However, I am fully aware that the general consensus is DB beats all. I'll be looking for a reputable FA in the near future.
Essentially, Mrs R has a DB pension that kicks in around 2025. She's just turned 50 and the last transfer value (early 2015) was £200k+. Casually looking at annuity figures suggest she could get more than the defined benefit and 5 years earlier.
However, I am fully aware that the general consensus is DB beats all. I'll be looking for a reputable FA in the near future.
Mikey,
Gilt yields over the past few months have underscored a drop in DB values. If your wife's pension administrator services one illustration each year, now would be a good time to get one. I wrote this the other day (7th post down) which may give you food for thought. In addition, if your wife's DB scheme is a private one, have her check the latest statement of scheme funding and general robustness. Many DB schemes are in trouble.
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Gilt yields over the past few months have underscored a drop in DB values. If your wife's pension administrator services one illustration each year, now would be a good time to get one. I wrote this the other day (7th post down) which may give you food for thought. In addition, if your wife's DB scheme is a private one, have her check the latest statement of scheme funding and general robustness. Many DB schemes are in trouble.
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Ginge,
Just read your post, very interesting... and lots to think about!
The pension is from a High Street bank, albeit not one of the big ones, so I'm comfortable it's not going to disappear. But it's hard to ignore the initial apparent benefit of transferring out (increased annual payment and being able to draw earlier). Coincidently, we've just requested a transfer value so will be interested to see how it much it differs from the last one.
Thanks again.
Just read your post, very interesting... and lots to think about!
The pension is from a High Street bank, albeit not one of the big ones, so I'm comfortable it's not going to disappear. But it's hard to ignore the initial apparent benefit of transferring out (increased annual payment and being able to draw earlier). Coincidently, we've just requested a transfer value so will be interested to see how it much it differs from the last one.
Thanks again.
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