Pensions transferring out SJP any good?
Discussion
I have a defined benefits pension scheme, which for various reasons makes more sense for me to transfer out of. Transfer out value is around £400K. I am 57 and will stop work this year.
Original idea was to take 25% cash then buy annuity with remaining. Cash would buy BTl and generate 4k per year conservatively, annuity would generate another 12K approx. Annuity would be flat with no widows pension RPI etc. Was quite happy with this option , fits well with overall financial plans.
However I am having issues finding IFA who will do this as although the soft facts provide compelling reasons to do this, their reports will compare to an annuity with indexing , widows pension etc, and will not be favourable.
Thinking seems to be its easy to transfer out to drawdown mortgage as they can justify this to their compliance.
I have looked at length into draw down mortgage v annuity and am pretty happy I am aware of the pros and cons.
However what i am struggling with, is who to use, unlike annuities, or life cover, or pretty much any other financial product, there does not appear to be any comparison tables you can look at.
Have seen someone from SJP, but am aware that they can only advise on their own products, I have no idea if they are nay good at all compared to any one else? Was looking at their SJP pension immediate income portfolio. Go online and there are a few sites/ articles saying they charge a lot. But they are also big and growing, which leads one to believe they are doing something right!
I do not want to go the SIPP route and look after it myself as I will have better things to do than pick stocks, bonds etc.
So any one know of any comparison sites, or any idea if SJP are any good? Or if not who is?
Original idea was to take 25% cash then buy annuity with remaining. Cash would buy BTl and generate 4k per year conservatively, annuity would generate another 12K approx. Annuity would be flat with no widows pension RPI etc. Was quite happy with this option , fits well with overall financial plans.
However I am having issues finding IFA who will do this as although the soft facts provide compelling reasons to do this, their reports will compare to an annuity with indexing , widows pension etc, and will not be favourable.
Thinking seems to be its easy to transfer out to drawdown mortgage as they can justify this to their compliance.
I have looked at length into draw down mortgage v annuity and am pretty happy I am aware of the pros and cons.
However what i am struggling with, is who to use, unlike annuities, or life cover, or pretty much any other financial product, there does not appear to be any comparison tables you can look at.
Have seen someone from SJP, but am aware that they can only advise on their own products, I have no idea if they are nay good at all compared to any one else? Was looking at their SJP pension immediate income portfolio. Go online and there are a few sites/ articles saying they charge a lot. But they are also big and growing, which leads one to believe they are doing something right!
I do not want to go the SIPP route and look after it myself as I will have better things to do than pick stocks, bonds etc.
So any one know of any comparison sites, or any idea if SJP are any good? Or if not who is?
I have a few clients with investments with SJP.
Yes their charges are expensive but all clients are very happy with the investment return.
If you transfer to a personal pension that permits drawdown, even if you have no intention of utilising it, you must seek independent financial advice before effecting the defined benefit transfer. In my experience, if the likely advice is not to transfer you may struggle to get the advice report and certification the defined benefit scheme will require.
Yes their charges are expensive but all clients are very happy with the investment return.
If you transfer to a personal pension that permits drawdown, even if you have no intention of utilising it, you must seek independent financial advice before effecting the defined benefit transfer. In my experience, if the likely advice is not to transfer you may struggle to get the advice report and certification the defined benefit scheme will require.
Thanks for replies so far.
I could take early pension from current provider, but amount is much lower, as you would expect cos its indexed and has other benefits, I do not want.
Also cash available is sig lower. As said, i do know with no doubt, due to a wide variety of factors that transfer out is the answer.
Just need to know if doing it with deferred pension with SJP is the answer!
I could take early pension from current provider, but amount is much lower, as you would expect cos its indexed and has other benefits, I do not want.
Also cash available is sig lower. As said, i do know with no doubt, due to a wide variety of factors that transfer out is the answer.
Just need to know if doing it with deferred pension with SJP is the answer!
I have a few clients with investments with SJP.
Yes their charges are expensive but all clients are very happy with the investment return.
That is good to know - to say how big they are, there is actually remarkably little adverse criticism on the internet.
If you transfer to a personal pension that permits drawdown, even if you have no intention of utilising it, you must seek independent financial advice before effecting the defined benefit transfer. In my experience, if the likely advice is not to transfer you may struggle to get the advice report and certification the defined benefit scheme will require.
Yes thats correct above 30K value, easier for them to get positive report on drawdown than straight annuity, cos of other benefits, ie ability to pass pot on.
Yes their charges are expensive but all clients are very happy with the investment return.
That is good to know - to say how big they are, there is actually remarkably little adverse criticism on the internet.
If you transfer to a personal pension that permits drawdown, even if you have no intention of utilising it, you must seek independent financial advice before effecting the defined benefit transfer. In my experience, if the likely advice is not to transfer you may struggle to get the advice report and certification the defined benefit scheme will require.
Yes thats correct above 30K value, easier for them to get positive report on drawdown than straight annuity, cos of other benefits, ie ability to pass pot on.
Yes, thats correct - with using an annuity it does not easily work, with using drawdown it does, I know others in same scheme who have gone down that route.
Just wish there was a way of comparing providers performance after fees over say last 5 years. i know its no gtee, but it would give you an idea!!
Just wish there was a way of comparing providers performance after fees over say last 5 years. i know its no gtee, but it would give you an idea!!
I've been with SJP (and previous named incarnations) for over 20 years.
Yes their charges are higher than some, but in my experience (and values can go down as well as up), they've provided great returns. All my pensions and other investments are now with them and the returns I get have (so far) out performed anything else ive had.
This advice is of course worth what you paid for it
Yes their charges are higher than some, but in my experience (and values can go down as well as up), they've provided great returns. All my pensions and other investments are now with them and the returns I get have (so far) out performed anything else ive had.
This advice is of course worth what you paid for it
Good reports on SJP above but personally wouldn't touch them with a barge pole.
Was with them for a good few years but felt the level of personal service was poor, this may have been down to the FA rather than SJP.
High charges but returns were steady ( but so were the markets) I transferred all my money out but had to pay what I thought were high charges.
Too many administration mistakes with them, I actually got a cheque last month made out for £42 as they had been audited and when transferring my pension 5 years ago they underpaid on the transfer figure.
So I have managed to draw £42 out of my pension at 49...........thanks SJP
Lot of talk the talk and fancy offices, brochures etc.
Just my personal experience.
Was with them for a good few years but felt the level of personal service was poor, this may have been down to the FA rather than SJP.
High charges but returns were steady ( but so were the markets) I transferred all my money out but had to pay what I thought were high charges.
Too many administration mistakes with them, I actually got a cheque last month made out for £42 as they had been audited and when transferring my pension 5 years ago they underpaid on the transfer figure.
So I have managed to draw £42 out of my pension at 49...........thanks SJP
Lot of talk the talk and fancy offices, brochures etc.
Just my personal experience.
Sjp do get a bit of a mixed reception on here but credit where credit is due whilst their ISA's returns for me have been middling, the pension returns have given me plenty to smile about over the last 10 years averaging 10.4% per year after all charges which I think is pretty good going.
Stevemr said:
Yes, thats correct - with using an annuity it does not easily work, with using drawdown it does, I know others in same scheme who have gone down that route.
Just wish there was a way of comparing providers performance after fees over say last 5 years. i know its no gtee, but it would give you an idea!!
ARC data does this for discretionary services, placing them in their own defined risk categories as best fit and based on all available data from actual client portfolios and performance on a risk adjusted basis. Draw your own conclusions as to why not all providers give their data to an independent verifier...Just wish there was a way of comparing providers performance after fees over say last 5 years. i know its no gtee, but it would give you an idea!!
Nigh on impossible for an advised service as the variance of underlying assets is too great.
I wouldn't touch StJP with a barge pole by the way. Charge like a wounded rhino and the variability of advice from self employed partner to partner is far too great.
PurpleMoonlight said:
The primary concern for the IFA will be the critical yield to match the define benefits. Other factors are relevant, but secondary.
I'm not so sure that the hierarchy is so vertical anymore. You, rightly, refer to the critical yield (the rate of return that would have to be achieved in an intended defined contribution pension scheme to replicate the benefits of the surrendering DB scheme) which was practically the only thing the profession focused on. It was certainly the most important. It was/is determined using a Transfer Value Analysis (TVAS) report.Since 'Pensions Freedoms', the position has changed somewhat. Indeed, the regulator has gone so far as to state "Our supervisory work has revealed that some firms have been recommending pension transfers based solely on whether or not the critical yield is below a certain rate set by the firm for assessing transfers generally. This does not meet our expectations".
These days, much more is taken into account. Advisers consider the personal circumstances of the client and family (and intended circumstances before making any personal recommendation), taking into account more specific other factors as they apply to the client than you can shake a stick at. These include likely income, attitude towards investment risk, personal health etc, as well as many others. Having said that, the presumption at outset has to be that it will invariably be in the best interests of the client NOT to transfer.
One aspect to affirm suitability that is frowned on, for instance, is the ability to bequeath a DC benefit, compared to a DB benefit (which may be lost for good on death). It's a very useful benefit, but if an adviser bases his/her advice solely (or nearly solely) around that, they are more than likely going to be asking for trouble. An indemnifier will simply ask "Hey. If succession planning was do important, did the client consider suitable insurance, whilst keeping the certainty of the DB income?".
I did a Critical Yield calculation recently, for an incredibly convoluted scheme, that (for reasons that are too complicated to explain) showed a CY of over 200%. Another point worth bearing in mind, and briefly referring to the point about the importance of Critical Yield, if benefits wish to be transferred and taken at a client's normal retirement age, a simple comparison with annuity rates is all that is required. The TVAS is redundant. Chapter and verse, and some other stuff on TVAS:
https://www.handbook.fca.org.uk/handbook/COBS/19/1...
One interesting point surrounding health, is one relating to terminal illness. HMRC is, as well will all know, more than keen to share in our success in life, after we die. There have been one of two cases recently where, it has tried to dip into pension pots. About a year or so back, a few weeks after making a transfer, a woman making the transfer, died. Because she was subsequently found to be terminally ill, HMRC treated the transfer as a chargeable lifetime transfer and applied a demand for inheritance tax on the sum transferred. The long and the short of it is, the lady's estate challenged HMRC and won. HMRC appealed and lost.
But, it's important to note - that legislation remains extant. Currently, HMRC *can* treat a transfer between two pension schemes as a loss to an individual's estate, because the individual at least *has the option* of transferring that money into a scheme that pays death benefits into the estate on their death. Most schemes do not do this, but if the person making the transfer lives beyond the two year point, this potential loss is not considered relevant. Two years was chosen for no other reason than it may have been one, or three.
But the important thing is, if someone making a transfer is in ill health when they make the transfer, and if they die within those first two years, HMRC *may* decide to go after the estate for inheritance tax, liable and based on the amount transferred.
Ginge R said:
I'm not so sure that the hierarchy is so vertical anymore. You, rightly, refer to the critical yield (the rate of return that would have to be achieved in an intended defined contribution pension scheme to replicate the benefits of the surrendering DB scheme) which was practically the only thing the profession focused on. It was certainly the most important. It was/is determined using a Transfer Value Analysis (TVAS) report.
Since 'Pensions Freedoms', the position has changed somewhat. Indeed, the regulator has gone so far as to state "Our supervisory work has revealed that some firms have been recommending pension transfers based solely on whether or not the critical yield is below a certain rate set by the firm for assessing transfers generally. This does not meet our expectations".
These days, much more is taken into account. Advisers consider the personal circumstances of the client and family (and intended circumstances before making any personal recommendation), taking into account more specific other factors as they apply to the client than you can shake a stick at. These include likely income, attitude towards investment risk, personal health etc, as well as many others. Having said that, the presumption at outset has to be that it will invariably be in the best interests of the client NOT to transfer.
One aspect to affirm suitability that is frowned on, for instance, is the ability to bequeath a DC benefit, compared to a DB benefit (which may be lost for good on death). It's a very useful benefit, but if an adviser bases his/her advice solely (or nearly solely) around that, they are more than likely going to be asking for trouble. An indemnifier will simply ask "Hey. If succession planning was do important, did the client consider suitable insurance, whilst keeping the certainty of the DB income?".
I did a Critical Yield calculation recently, for an incredibly convoluted scheme, that (for reasons that are too complicated to explain) showed a CY of over 200%. Another point worth bearing in mind, and briefly referring to the point about the importance of Critical Yield, if benefits wish to be transferred and taken at a client's normal retirement age, a simple comparison with annuity rates is all that is required. The TVAS is redundant. Chapter and verse, and some other stuff on TVAS:
https://www.handbook.fca.org.uk/handbook/COBS/19/1...
One interesting point surrounding health, is one relating to terminal illness. HMRC is, as well will all know, more than keen to share in our success in life, after we die. There have been one of two cases recently where, it has tried to dip into pension pots. About a year or so back, a few weeks after making a transfer, a woman making the transfer, died. Because she was subsequently found to be terminally ill, HMRC treated the transfer as a chargeable lifetime transfer and applied a demand for inheritance tax on the sum transferred. The long and the short of it is, the lady's estate challenged HMRC and won. HMRC appealed and lost.
But, it's important to note - that legislation remains extant. Currently, HMRC *can* treat a transfer between two pension schemes as a loss to an individual's estate, because the individual at least *has the option* of transferring that money into a scheme that pays death benefits into the estate on their death. Most schemes do not do this, but if the person making the transfer lives beyond the two year point, this potential loss is not considered relevant. Two years was chosen for no other reason than it may have been one, or three.
But the important thing is, if someone making a transfer is in ill health when they make the transfer, and if they die within those first two years, HMRC *may* decide to go after the estate for inheritance tax, liable and based on the amount transferred.
The FCA has actually altered it's wording/stance via the latest consultation paper:Since 'Pensions Freedoms', the position has changed somewhat. Indeed, the regulator has gone so far as to state "Our supervisory work has revealed that some firms have been recommending pension transfers based solely on whether or not the critical yield is below a certain rate set by the firm for assessing transfers generally. This does not meet our expectations".
These days, much more is taken into account. Advisers consider the personal circumstances of the client and family (and intended circumstances before making any personal recommendation), taking into account more specific other factors as they apply to the client than you can shake a stick at. These include likely income, attitude towards investment risk, personal health etc, as well as many others. Having said that, the presumption at outset has to be that it will invariably be in the best interests of the client NOT to transfer.
One aspect to affirm suitability that is frowned on, for instance, is the ability to bequeath a DC benefit, compared to a DB benefit (which may be lost for good on death). It's a very useful benefit, but if an adviser bases his/her advice solely (or nearly solely) around that, they are more than likely going to be asking for trouble. An indemnifier will simply ask "Hey. If succession planning was do important, did the client consider suitable insurance, whilst keeping the certainty of the DB income?".
I did a Critical Yield calculation recently, for an incredibly convoluted scheme, that (for reasons that are too complicated to explain) showed a CY of over 200%. Another point worth bearing in mind, and briefly referring to the point about the importance of Critical Yield, if benefits wish to be transferred and taken at a client's normal retirement age, a simple comparison with annuity rates is all that is required. The TVAS is redundant. Chapter and verse, and some other stuff on TVAS:
https://www.handbook.fca.org.uk/handbook/COBS/19/1...
One interesting point surrounding health, is one relating to terminal illness. HMRC is, as well will all know, more than keen to share in our success in life, after we die. There have been one of two cases recently where, it has tried to dip into pension pots. About a year or so back, a few weeks after making a transfer, a woman making the transfer, died. Because she was subsequently found to be terminally ill, HMRC treated the transfer as a chargeable lifetime transfer and applied a demand for inheritance tax on the sum transferred. The long and the short of it is, the lady's estate challenged HMRC and won. HMRC appealed and lost.
But, it's important to note - that legislation remains extant. Currently, HMRC *can* treat a transfer between two pension schemes as a loss to an individual's estate, because the individual at least *has the option* of transferring that money into a scheme that pays death benefits into the estate on their death. Most schemes do not do this, but if the person making the transfer lives beyond the two year point, this potential loss is not considered relevant. Two years was chosen for no other reason than it may have been one, or three.
But the important thing is, if someone making a transfer is in ill health when they make the transfer, and if they die within those first two years, HMRC *may* decide to go after the estate for inheritance tax, liable and based on the amount transferred.
"We therefore propose to remove the existing guidance that an adviser should start from the assumption that a transfer will be unsuitable"
It still states:
"That for most people retaining safeguarded benefits will likely be in their best interests and advisers should have regard to this".
I work for one of the largest INDEPENDENT financial advisers in th UK and we're active in the DB space. I am aware of a number of my colleagues who have had insistant clients (potentially like the OP). It's a complex area with a great deal of risk for individuals and firms alike.
DoubleSix said:
I work for one of the largest INDEPENDENT financial advisers in th UK and we're active in the DB space. I am aware of a number of my colleagues who have had insistant clients (potentially like the OP). It's a complex area with a great deal of risk for individuals and firms alike.
DB space? Gees.ellroy said:
Stevemr said:
Yes, thats correct - with using an annuity it does not easily work, with using drawdown it does, I know others in same scheme who have gone down that route.
Just wish there was a way of comparing providers performance after fees over say last 5 years. i know its no gtee, but it would give you an idea!!
ARC data does this for discretionary services, placing them in their own defined risk categories as best fit and based on all available data from actual client portfolios and performance on a risk adjusted basis. Draw your own conclusions as to why not all providers give their data to an independent verifier...Just wish there was a way of comparing providers performance after fees over say last 5 years. i know its no gtee, but it would give you an idea!!
Nigh on impossible for an advised service as the variance of underlying assets is too great.
I wouldn't touch StJP with a barge pole by the way. Charge like a wounded rhino and the variability of advice from self employed partner to partner is far too great.
BarryGibb said:
ellroy said:
Stevemr said:
Yes, thats correct - with using an annuity it does not easily work, with using drawdown it does, I know others in same scheme who have gone down that route.
Just wish there was a way of comparing providers performance after fees over say last 5 years. i know its no gtee, but it would give you an idea!!
ARC data does this for discretionary services, placing them in their own defined risk categories as best fit and based on all available data from actual client portfolios and performance on a risk adjusted basis. Draw your own conclusions as to why not all providers give their data to an independent verifier...Just wish there was a way of comparing providers performance after fees over say last 5 years. i know its no gtee, but it would give you an idea!!
Nigh on impossible for an advised service as the variance of underlying assets is too great.
I wouldn't touch StJP with a barge pole by the way. Charge like a wounded rhino and the variability of advice from self employed partner to partner is far too great.
https://www.sjp.co.uk/wealth-management/retirement...
CarlosFandango11 said:
BarryGibb said:
ellroy said:
Stevemr said:
Yes, thats correct - with using an annuity it does not easily work, with using drawdown it does, I know others in same scheme who have gone down that route.
Just wish there was a way of comparing providers performance after fees over say last 5 years. i know its no gtee, but it would give you an idea!!
ARC data does this for discretionary services, placing them in their own defined risk categories as best fit and based on all available data from actual client portfolios and performance on a risk adjusted basis. Draw your own conclusions as to why not all providers give their data to an independent verifier...Just wish there was a way of comparing providers performance after fees over say last 5 years. i know its no gtee, but it would give you an idea!!
Nigh on impossible for an advised service as the variance of underlying assets is too great.
I wouldn't touch StJP with a barge pole by the way. Charge like a wounded rhino and the variability of advice from self employed partner to partner is far too great.
https://www.sjp.co.uk/wealth-management/retirement...
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