Transferring defined benefits pension into sipp
Discussion
I'm hoping someone here might be able to offer a bit of insight into this for me.
My wife has a few old pension pots from past employment with various life assurance firms.
The projected benefits aren't enormous (4k pa or thereabouts I think) but they're defined benefits and the transfer value exceeds £30k - which means she can't just switch them away into a sipp on her own say so.
We've had a go at trying to educate ourselves about this, but we're not getting anywhere. The one adviser she did actually start a dialogue with wasn't keen and was a dead end.
So, I get that there's a requirement to 'take advice' but are you required to heed that advice?
I.E. If the adviser isn't keen on the transfer, can you just say thanks, I've heard your advice and I'm happy to proceed in my own direction?
Hope that makes sense, all input welcome.
My wife has a few old pension pots from past employment with various life assurance firms.
The projected benefits aren't enormous (4k pa or thereabouts I think) but they're defined benefits and the transfer value exceeds £30k - which means she can't just switch them away into a sipp on her own say so.
We've had a go at trying to educate ourselves about this, but we're not getting anywhere. The one adviser she did actually start a dialogue with wasn't keen and was a dead end.
So, I get that there's a requirement to 'take advice' but are you required to heed that advice?
I.E. If the adviser isn't keen on the transfer, can you just say thanks, I've heard your advice and I'm happy to proceed in my own direction?
Hope that makes sense, all input welcome.
Good luck with this, I transferred a DB pension in January as I was aware the contingent charging was coming to an end in October. Lots of IFA have lost the license to transfer DB pensions so you’ll have a job finding one. Since October you’ll have to pay the fee up front whether they advise to transfer out or not. If they advise not to to transfer out you can still do so but your marked as an an insistent customer and not all receiving SIPPs will accept an insistent customer.
OP started this thread by saying:
"My wife has a few old pension pots from past employment with various life assurance firms.
The projected benefits aren't enormous."
So, if that is the case. maybe each transfer sum is less than £30,000, which means that each potential transfer to the proposed SIPP can be treated separately and not subject to the greater than £30,000so need for IFA advice.
R.
"My wife has a few old pension pots from past employment with various life assurance firms.
The projected benefits aren't enormous."
So, if that is the case. maybe each transfer sum is less than £30,000, which means that each potential transfer to the proposed SIPP can be treated separately and not subject to the greater than £30,000so need for IFA advice.
R.
The Leaper said:
OP started this thread by saying:
"My wife has a few old pension pots from past employment with various life assurance firms.
The projected benefits aren't enormous."
So, if that is the case. maybe each transfer sum is less than £30,000, which means that each potential transfer to the proposed SIPP can be treated separately and not subject to the greater than £30,000so need for IFA advice.
R.
"My wife has a few old pension pots from past employment with various life assurance firms.
The projected benefits aren't enormous."
So, if that is the case. maybe each transfer sum is less than £30,000, which means that each potential transfer to the proposed SIPP can be treated separately and not subject to the greater than £30,000so need for IFA advice.
R.
Thanks for the thought, but sadly not the case - they exceed 30k each.
I've successfully transferred one of my own that was under the limit, I just wish this was as simple.
cloud_dog said:
Just for clarity, you do not need a positive review from a Pension Transfer ISA specialist, simply that you have taken appropriate advice, although of the few providers who may accept transfers there are even less who will accept a persistent client.
Thanks, that's very helpful. I was once called a vexatious litigant, now I guess I'm a persistent client
I’ve been looking at mine again as the transfer value multiple has increased that it would last me till I’m 94 on a straight drawdown equivalent. As I’m recently divorced it doesn’t have the benefit of having 50% for a spouse.
My gut feeling is that I would benefit more outside of the DB bubble but appreciate it’s probably more complex than that.
My gut feeling is that I would benefit more outside of the DB bubble but appreciate it’s probably more complex than that.
A good friend used this lady to transfer 2 or 3 legacy DBs into his SIPP. She was one of the few who would do this for a reasonable agreed fee rather than a silly % of transfer value. https://www.dawnslater.co.uk/ He is though a retired accountant so knows what he wanted. This was around two years ago - I'm not sure if Dawn still offers this service as I saw no mention on her website.
Many advisers have stopped for the simple reason the risk to them of giving advice on the subject is so high that to retain the badge their indemnity insurance premiums have gone through the roof. It just isn’t cost effective for many to offer the advice, we don’t.
As has been mentioned contingent charging is finished, so you’re looking at a large fee, due to the above, even if they don’t recommend your transfer. Couple that to the vast majority of providers not wanting insistent clients due to a legal case making an insurer pay out even though they’d not had any part of the advice process and it’s tough for people to get advice on relatively small pots of money.
My sympathies to those with reasonable reasons for doing so, but in large part I do agree with the FCA that to not transfer is the starting point for any conversation.
As has been mentioned contingent charging is finished, so you’re looking at a large fee, due to the above, even if they don’t recommend your transfer. Couple that to the vast majority of providers not wanting insistent clients due to a legal case making an insurer pay out even though they’d not had any part of the advice process and it’s tough for people to get advice on relatively small pots of money.
My sympathies to those with reasonable reasons for doing so, but in large part I do agree with the FCA that to not transfer is the starting point for any conversation.
Depending how far the wife is from retirement, another thought is to sit it out and see if the DB fund(s) at some point offer an enhanced transfer value as part of a liability management program. Another friend of mine took advantage of this in 2018. Even though the resultant transfer value ended up taking his SIPP almost £0.5m above his personal LifeTime Allowance he took the offer up. An adviser was paid for by the former employer. I'm out of touch with how common these exercises are nowadays - possibly it's mainly the larger DB funds and perhaps they target larger deferred pensions as the overheads for each case are substantial.
Forget it, now even harder.
No mainstream providers left willing to accept a transfer if you're advised against it. Transfer values are way down as the cost of secure income has decreased. There is still a strong bias to having enough secure income to cover essentials.
Just be thankful you have some guaranteed lifetime income to supplement the state pension and use your other assets for flexibility.
The person stating it would take until 94 earlier in this thread clearly didn't account for any escalation because I have never seen a CETV take that long to be matched through income payments.
No mainstream providers left willing to accept a transfer if you're advised against it. Transfer values are way down as the cost of secure income has decreased. There is still a strong bias to having enough secure income to cover essentials.
Just be thankful you have some guaranteed lifetime income to supplement the state pension and use your other assets for flexibility.
The person stating it would take until 94 earlier in this thread clearly didn't account for any escalation because I have never seen a CETV take that long to be matched through income payments.
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