Old Prudential Staff Pension

[wiggy001]

I'm currently getting my finances in order and accepting that I may need to talk to an FA, I just wondered if anyone had any thoughts on the following.

I worked for the Prudential for 5 years, although only 2.5 years were pensionable service (2001 - 2003). I have a leaving statement dated January 2004 stating the transfer value of this pension was £4732 (inclusive of GMP). It also states the pension as being £1370 per annum from my normal retirement age. I've done nothing with this pension since then.

I have just received an Estimated Transfer Value statement giving a transfer value of £59,101.12. I don't understand the difference between this sum and the £4732 transfer value I was given on leaving?

If I understand correctly (a big assumption), this pension will simply keep up with inflation. So my question is: should I leave it as is, or transfer it to a SIPP and invest the money more actively?

I have a couple of other pensions and realise this one isn't going to give me a millionaire lifestyle when I retire, but if anyone is able to give any insight on the numbers here and whether there is a "general consensus" on the right thing to do I would appreciate it.

TIA

[williaa68]

I think that's a really difficult question and I suspect finding someone reputable to give you insured advice will i be quite tricky. There are others on here who may be able to give you pointers to someone who can give you advice and / or tell you what you might expect to pay for it.

The difference in the transfer values is I imagine largely a function of interest rates / gilt yields and mortality assumptions. Broadly speaking the Pru (and they should know...) probably thinks you are going to live longer and their investments that back the pension scheme return less than they did 16 years ago. Your Pru pension is probably index linked, has a spouse benefit etc.

It isn't a decision that you have to make now of course and there are lots of things you need to take into account - the value of that pension for lifetime allowance purposes is very low for example (I think 20 times the pension so £27k) - what are the chances you would breach the lifetime allowance limit by the time you are 65 (or whatever). I would have thought it you are going to get advice, it is worth getting advice on your overall pension situation rather than this fund in particular.

Good luck with it all.

[JulianPH]

I agree with Andrew (above).

You need financial advice (as your DB pension in question is greater than £30k).

I know advisers who will do this on a one off basis (rather than for an ongoing annual fee on top of this). Feel free to PM me.

[SunsetZed]

Whilst I agree on the idea to get advice on the above and without wishing to influence your decision by simply looking at the Pru pension in isolation the transfer value you've been offered is far better than what I was offered a couple of months ago by a previous employer (32k transfer value on a £2.5k per annum pension).

I'm not sure if that information is the kind that you were looking for when you posted or of no use at all!

[wiggy001]

My main question was around the difference in transfer values then and now which I didn't really understand but think I now do having read up on DB pensions over the weekend.

Thanks for the comments- much appreciated.

Edited by wiggy001 on Monday 24th June 13:41

[The Leaper]

wiggy,

Maybe Pru has made an error with the latest estimate, does happen. I would advise taking no action until you have checked this out. Otherwise, if you do and it does turn out to be an error by Pru you have no legal basis to support a complaint against them as it's only an estimate and will not contain any guarantees..

R.