Final Salary Pension Transfer Values & Options

[pauljdh]

Im 56 and have two final salary (defined benefit) schemes, 1 x active and 1 x as a deferred pensioner. Both are with the same company / trustees.

The transfer values are declared as 385K (active scheme) and 442K (deferred scheme).

TV is not the same as cash value, is that correct?

I know its a minefield but what options spring to mind? I know I need to take professional advice but don't want to invoke too much interest in them yet, just wondered if any informed peeps out there could comment on a way to proceed.

I have a small money purchase pension too and some stand alone AVC's (defined contributions)

Id like to finish work in approx 3 years...

Cheers

[otherman]

Transfer value is sort of cash. If you transfer out of the scheme into a private pension, you can cash it, but you'd pay tax on anything over the first 25%. You could draw down a little every year though, to stay within the 20% band for instance.
If you do this, you take on the risks of inflation, exchange rates (unless you keep it all invested in UK stock, which would be an extra risk of its own), interest rates and investment returns. On the other hand, you can keep the final salary pensions, which are inflation indexed with someone else taking on all the risk.

[ellroy]

You also take on the fees if you move out of them.

Give the amounts you are nudging close to the cap as it stands, not wholly accurate I know before anyone starts, but with AVCs and the other pension you mention also something you may need advice on.

[pauljdh]

Thanks Gents, my firm will pay for a one off professional report on my pensions, its a taxable benefit. I just want to get a bit better cluded up before I go into bat, it may be I can't afford to retire, it may be that I can manage to go next year.
Paul

[Ginge R]

It shouldn't be behind a paywall, but if it is, search 'FT stampede to cash in on final salary pensions', or some such thing. The nuclear option, take regulated advice that you trust etc.

https://www.ft.com/content/c2ed71f4-c694-11e6-9043...

[Mattt]

I thought the standard position is that you'd have to be mad to transfer out of a DB scheme?

[sidicks]

Mattt said:

I thought the standard position is that you'd have to be mad to transfer out of a DB scheme?

It depends on the terms of the transfer.

[Mattt]

True, the guys I've worked with who looked at it were given paltry transfer out offers compared to the DB they would get.

[Jack drinker]

With the perfect storm of pension freedom legislation and soaring transfer values, it's no longer the no brainier to stay with the DB scheme that it once was.

[CarlosFandango11]

Mattt said:

True, the guys I've worked with who looked at it were given paltry transfer out offers compared to the DB they would get.

The opposite is true of me and the guys that I've worked with.

[sidicks]

CarlosFandango11 said:

The opposite is true of me and the guys that I've worked with.

Very much depends on the characteristics of the scheme you are in!

[timbo999]

I think one advantage of transferring out of a DB scheme is you can then leave it someone as an inheritance?