Another Final salary thread
Discussion
I recently ordered a quote for the transfer value of my final salary pension, the scheme looks like it’s promoting a transfer given the values involved.
Pension would provide £5,980 per annum or a transfer value now of £235k. It says the minimum pension age is 65.
I am no longer a part of the scheme following employment elsewhere.
I have called around a couple of places/IFAs which have said they wouldn’t be able to give me advice for the switch due to my current age - 36.
Does anyone have a recommendation who to get in contact with or see any reason why I wouldn’t switch? I would prefer to manage the sum myself within a SIPP.
Pension would provide £5,980 per annum or a transfer value now of £235k. It says the minimum pension age is 65.
I am no longer a part of the scheme following employment elsewhere.
I have called around a couple of places/IFAs which have said they wouldn’t be able to give me advice for the switch due to my current age - 36.
Does anyone have a recommendation who to get in contact with or see any reason why I wouldn’t switch? I would prefer to manage the sum myself within a SIPP.
btdk5 said:
I recently ordered a quote for the transfer value of my final salary pension, the scheme looks like it’s promoting a transfer given the values involved.
Pension would provide £5,980 per annum or a transfer value now of £235k. It says the minimum pension age is 65.
I am no longer a part of the scheme following employment elsewhere.
I have called around a couple of places/IFAs which have said they wouldn’t be able to give me advice for the switch due to my current age - 36.
Does anyone have a recommendation who to get in contact with or see any reason why I wouldn’t switch? I would prefer to manage the sum myself within a SIPP.
If the income from this final salary pension is index linked then transferring away may not be a good idea at all.Pension would provide £5,980 per annum or a transfer value now of £235k. It says the minimum pension age is 65.
I am no longer a part of the scheme following employment elsewhere.
I have called around a couple of places/IFAs which have said they wouldn’t be able to give me advice for the switch due to my current age - 36.
Does anyone have a recommendation who to get in contact with or see any reason why I wouldn’t switch? I would prefer to manage the sum myself within a SIPP.
What you have been told by IFAs is complete and utter rubbish though.
The are, of course, many reasons you may want to transfer out and if you would like to speak to a professional to just get an idea of everything then I can put you in toch with one (Nik, from the IM sticky).
As I said though, it is likely to be in your best advantage to stay where you are unless there are other, more compelling, reasons to transfer away (which would require independent financial advice in any event).
btdk5 said:
I recently ordered a quote for the transfer value of my final salary pension, the scheme looks like it’s promoting a transfer given the values involved.
Pension would provide £5,980 per annum or a transfer value now of £235k. It says the minimum pension age is 65.
I am no longer a part of the scheme following employment elsewhere.
I have called around a couple of places/IFAs which have said they wouldn’t be able to give me advice for the switch due to my current age - 36.
Does anyone have a recommendation who to get in contact with or see any reason why I wouldn’t switch? I would prefer to manage the sum myself within a SIPP.
What makes you think you would prefer to manage the money yourself?Pension would provide £5,980 per annum or a transfer value now of £235k. It says the minimum pension age is 65.
I am no longer a part of the scheme following employment elsewhere.
I have called around a couple of places/IFAs which have said they wouldn’t be able to give me advice for the switch due to my current age - 36.
Does anyone have a recommendation who to get in contact with or see any reason why I wouldn’t switch? I would prefer to manage the sum myself within a SIPP.
Were they IFA’s you have spoken to?
Is that the current pension and does it include things like RPI increases and widows pension?
Do you have other arrangements?
The financial advisors you have spoken to haven’t necessarily spoken rubbish, they may not or may not, be able to help you anyway.
If all you have given them is the infirmation in your post then nobody can give you an opinion anyway.
You will almost certainly be better leaving it where it is, but not necessarily.
So a (on the face of it) a simple question opens up many other questions.
Nick at IM may be able to talk you through options but he can’t give “advice” or recommendations. For that you will have to pay, and the way things are going with the FCA and PI premiums, you are going to pay a lot (think £5-10 k).
You are going to struggle here on two fronts
1. Age
2. Transfer value
When I say age, what is really meant is time until you retire. An IFA is really going to struggle to understand what would be most suitable for you in 20 or 30 years time. Too many variables at play.
With this advice costing £10k + to provide (thank the FCA and then the PI market for this...) then there is going to be no profit in the work for the IFA.
As the owner of an Advice business, you have a high risk transfer with no profit in it. I would pass and in all honesty can’t think of a competitor who would take it on.
This is maddening all round, but is where we are at.
1. Age
2. Transfer value
When I say age, what is really meant is time until you retire. An IFA is really going to struggle to understand what would be most suitable for you in 20 or 30 years time. Too many variables at play.
With this advice costing £10k + to provide (thank the FCA and then the PI market for this...) then there is going to be no profit in the work for the IFA.
As the owner of an Advice business, you have a high risk transfer with no profit in it. I would pass and in all honesty can’t think of a competitor who would take it on.
This is maddening all round, but is where we are at.
Thank you for both replies.
My initial thoughts regarding the transfer have stemmed from the current multiples. Happy to be corrected if this doesn’t make sense but at 39 times I would have to live to 104 for the current equivalent transfer value?
Added to that I would be able to access the funds at 55 rather than 65 and historical cost of living is priced around 3.5% a year. Which I believe would be outpaced by a 100% equity fund.
I have another DC pension I am now contributing to.
I’ve spoken to fidelity and some smaller IFAs that said that both my age and desire to manage myself are restricting their ability to give advice.
May be happy to concede managing myself if the fees were appropriate.
My initial thoughts regarding the transfer have stemmed from the current multiples. Happy to be corrected if this doesn’t make sense but at 39 times I would have to live to 104 for the current equivalent transfer value?
Added to that I would be able to access the funds at 55 rather than 65 and historical cost of living is priced around 3.5% a year. Which I believe would be outpaced by a 100% equity fund.
I have another DC pension I am now contributing to.
I’ve spoken to fidelity and some smaller IFAs that said that both my age and desire to manage myself are restricting their ability to give advice.
May be happy to concede managing myself if the fees were appropriate.
btdk5 said:
Thank you for both replies.
My initial thoughts regarding the transfer have stemmed from the current multiples. Happy to be corrected if this doesn’t make sense but at 39 times I would have to live to 104 for the current equivalent transfer value?
Added to that I would be able to access the funds at 55 rather than 65 and historical cost of living is priced around 3.5% a year. Which I believe would be outpaced by a 100% equity fund.
I have another DC pension I am now contributing to.
I’ve spoken to fidelity and some smaller IFAs that said that both my age and desire to manage myself are restricting their ability to give advice.
May be happy to concede managing myself if the fees were appropriate.
The problem in managing it yourself is that if you screw it up (no offence meant) then you go back to the IFA who did the transfer and say ‘why did you advise me to transfer? You knows I had no expertise in managing investments?’ The IFA hasn’t got a led to stand on.My initial thoughts regarding the transfer have stemmed from the current multiples. Happy to be corrected if this doesn’t make sense but at 39 times I would have to live to 104 for the current equivalent transfer value?
Added to that I would be able to access the funds at 55 rather than 65 and historical cost of living is priced around 3.5% a year. Which I believe would be outpaced by a 100% equity fund.
I have another DC pension I am now contributing to.
I’ve spoken to fidelity and some smaller IFAs that said that both my age and desire to manage myself are restricting their ability to give advice.
May be happy to concede managing myself if the fees were appropriate.
btdk5 said:
Which I believe would be outpaced by a 100% equity fund.
Oh the joy of being so young, with so little experience.100% equities may indeed outpace 3.5%.
Or they may tend to zero.
And then you pay fees on top. There are plenty of examples.
You don't need financial advice, you need a financial education. It would be very unwise to get that from burning otherwise guaranteed payments in your dotage.
carreauchompeur said:
Helicópter, why would this cost them £10k? Purely out of interest, OT and all 
The actual cost of giving the advice, paraplanning and report would cost me c. £1,500 (depending on the complexity involved) to deliver. I would want a profit margin on top of this.I am obliged (by law) to carry an insurance policy (PI cover) to cover the potential cost of a complaint thereafter. At present this cost is heading through the roof across the advice profession. With no long-stop the business has to carry this liability for decades potentially, and pay for the premiums.
Even at a £10k fee, the insurance risk makes it a non-starter for me.
We've never had a complaint in this area (either in our IFA or restricted business), so it's not as if we are a high risk firm.
Helicopter123 said:
The actual cost of giving the advice, paraplanning and report would cost me c. £1,500 (depending on the complexity involved) to deliver. I would want a profit margin on top of this.
I am obliged (by law) to carry an insurance policy (PI cover) to cover the potential cost of a complaint thereafter. At present this cost is heading through the roof across the advice profession. With no long-stop the business has to carry this liability for decades potentially, and pay for the premiums.
Even at a £10k fee, the insurance risk makes it a non-starter for me.
We've never had a complaint in this area (either in our IFA or restricted business), so it's not as if we are a high risk firm.
Well knock me over with a feather. I never had you down as an IFA.I am obliged (by law) to carry an insurance policy (PI cover) to cover the potential cost of a complaint thereafter. At present this cost is heading through the roof across the advice profession. With no long-stop the business has to carry this liability for decades potentially, and pay for the premiums.
Even at a £10k fee, the insurance risk makes it a non-starter for me.
We've never had a complaint in this area (either in our IFA or restricted business), so it's not as if we are a high risk firm.
Macron said:
Oh the joy of being so young, with so little experience.
100% equities may indeed outpace 3.5%.
Or they may tend to zero.
And then you pay fees on top. There are plenty of examples.
You don't need financial advice, you need a financial education. It would be very unwise to get that from burning otherwise guaranteed payments in your dotage.
Do you have one of these many examples that shows a global equity tracker returning less than 3.5% per annum over a 20 year time horizon? 100% equities may indeed outpace 3.5%.
Or they may tend to zero.
And then you pay fees on top. There are plenty of examples.
You don't need financial advice, you need a financial education. It would be very unwise to get that from burning otherwise guaranteed payments in your dotage.
Another can of worms thread.
OP
I have just done what you want to do and it is not easy, even for me at 52.
You will not find an IFA at all if you tell them you want to manage the fund yourself as they want ongoing fees for watching someone else manage them for them.
And at 30 something years old that yearly income figure will rise a fair bit by the time you are able to collect it.
I totally understand why you want to do this but you are over a barrel and you may not be allowed to.
OP
I have just done what you want to do and it is not easy, even for me at 52.
You will not find an IFA at all if you tell them you want to manage the fund yourself as they want ongoing fees for watching someone else manage them for them.
And at 30 something years old that yearly income figure will rise a fair bit by the time you are able to collect it.
I totally understand why you want to do this but you are over a barrel and you may not be allowed to.
Hi, I replied to some other threads recently, explained I did the same thing, almost same numbers as OP for £5k fixed price
The IFA I used recommended tideway as they were cheaper than him. But I didn’t want to involve missus in the calcs, which they insisted upon.
So used this guy, I shared the company name in a recent post. Feel free to PM me after finding that post if your interested.
I like u was glad to have money earlier, and would have had to live to a similar age to match the value, I think II.co.uk or royal London would accept the transfer regardless of the transfer advice
HTH
The IFA I used recommended tideway as they were cheaper than him. But I didn’t want to involve missus in the calcs, which they insisted upon.
So used this guy, I shared the company name in a recent post. Feel free to PM me after finding that post if your interested.
I like u was glad to have money earlier, and would have had to live to a similar age to match the value, I think II.co.uk or royal London would accept the transfer regardless of the transfer advice
HTH
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