SWMBO has a final salary scheme pension which will pay a pittance (about £4k) but has a transfer value of something like £120k, so she'd have to survive 30 years (I suppose less as the pension rises with inflation, but something over 20 years)
We'd prefer the money in a SIPP type of scheme where we can draw down as required. We are not that short of other funds and have no need for this as a regular income, also we have no need for the lump sum.
It also make IHT planning sense as if she croaks while taking the pension, I only get half, and when I croak it goes, whereas a SIPP pot would remain part of the estate.
So about 3 years back the company providing the pension offered her free IFA advice on what to do. They didn't quite get the gist of our reasoning and their advice centred on a throwaway statement we made about using some for a NISA, and they said we should not move it to a SIPP but keep it as a pension. She deiced to leave it at that time and deal with it once she left work, which is now imminent ( - feels like the wrong decision in hindsight!)
Anyway it seems the same IFA company want upwards of £2.5k to do the full fact find again, and run it by their tech people again. While I get this (up to a point), they say that their fact find is quite likely to result in a "keep" recommendation. But I can override that with a letter of insistence or somesuch.
Therefore it seems pointless going through the (expensive) motions as that is what I'm going to do, whatever the outcome.
Is there a different way to approach this? (SWMBO will be contacting the SIPP provider - likely Hargreaves Lansdowne - to see what they can offer.)
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Would Pension Wise be any good to you:
www.pensionwise.gov.uk/en
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Thanks, will have a read.
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I'd be interested in what you do - I am thinking of transferring my final salary fund. In my case it's more like £400k and since the final salary scheme ended, it will only pay the equivalent of about £12.5k I think. And I have a long time to go before I can get access to the funds.
I think I'm going to have to pay for the 'advice' which is probably a similar fee to what smokie refers and there's no way around it.
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Thanks Bromps but Pensionwise is only useful for Defined Contribution, not Defined Benefit (final salary).
It may be of help with another issue I see looming though!
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>> Thanks Bromps but Pensionwise is only useful for Defined Contribution, not Defined Benefit (final salary).
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>> It may be of help with another issue I see looming though!
>>
Pensionwise don't give advice, only guidance, it says on their website.
Even if your chosen provider won't take the transfer, you could transfer to another that will, and then leave it a while and move it again?
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Good point.
I really don't have a chosen provider as such. We have stuff with a few companies and it'd be good to consolidate it, merely from an admin pov.
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Write to the administrator, and if necessary the trustee direct, referring to the fact that you have already had advice, considered it carefully, and you insist on transferring with whatever waiver they require.
Any DB trustee will insist you take advice now, but you do not have to follow it.
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This 2016 article is a bit concerning, seems even if we pay the £2.5k and then reject the advice we might have trouble getting someone to take it on as a SIPP.
www.telegraph.co.uk/pensions-retirement/financial-planning/i-was-forced-to-waste-1k-on-advice-when-all-i-wanted-was-to-move1/
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I think a lot of it is from the mis-selling from IFA, banks etc. Everything is set to follow a process even if you don't want the outcome. I struggled to change aspects of my ISA, you can't change your portfolio risk profile to what you want. You have to answer a set of questions and hope you game the answers correctly to get the outcome you want. I didn't and had to faff about with my IFA and write letters and sign a statement or two to get what I wanted. It was a bit of a pain and that was inside the same company.
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I've consulted IFAs on a few occasions and the one time I took their advice resulted in a very poor return.
I reckon anyone with a modicum of common sense and a little mathematical ability doesn't need them.
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I'd like to think I've got both but I find mine to be worth it. He's aware of investment companies I'm pretty sure I'd have not found. The fee for both IFA and investment company is 0.7% which I think is reasonable. Returns have been double figures year on year.
I'm away a lot with work so it's nice to have someone keeping an eye on the investment business. Certainly works out as good vfm for me.
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>>I reckon anyone with a modicum of common sense and a little mathematical ability doesn't need them.
I mostly agree. Its just a shame that doesn't seem to be a very large proportion of the population.
Though many of us lack the time also.
Last edited by: No FM2R on Thu 4 Jan 18 at 17:05
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Problem with pension transfers is that it's more or less mandatory to go through an IFA. And as per the article above and, re whether it's right to move a pension or not, it's very difficult to go against an IFAs advice. Everyone is erring on the side of caution.
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>> Problem with pension transfers is that it's more or less mandatory to go through an
>> IFA.
For DB transfers yes. And you make the good point that some platforms and personal pension providers are getting frit too.
LV= offers retirement advice, I think. Might be worth checking likely cost if you are forced to take it again. I've been impressed, in a 'work' context.
Last edited by: Manatee on Thu 4 Jan 18 at 20:22
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Try and find a trusted indy IFA and not anyone affiliated to Hargreaves Lansdown, St James Place type networks.
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We once ended up wasting time talking to a recommended Financial Advisor a friend of my wife knows. Turns up and only then do we find it's St James' Place and it's all about investing with them. We actually wanted IFA.
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open a sipp with hargreaves . simple. ask for their help in transferring.
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Unless you have experience that proves otherwise, it really isn't that simple.
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it's nothing to be afraid off. open an account with Hargreaves is simple. choosing the correct or hopefully best funds is their expertise.
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So you've not read up about it then...
By pensions "law" you have to take advice from a suitably qualified IFA to be able to move a defined benefit fund.
Most are likely to advise against moving of a DB fund, partly due to the risk that they may get sued when the punter subsequently makes a dodgy investment decision and loses the lot, and partly because DB funds have supposed benefits which cannot be achieved by simply converting the pension to a SIPP.
Once you have your IFAs written advice, and if that advice is that you do not move the fund, you can be an "insistent" customer and do a handwritten (and probably voice recorded) letter overriding their advice but most SIPP companies won't accept you anyway.
HL won't, for sure.
So that's the cost of the IFA down the tubes for nothing...
Have a look at the links further up this thread...
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I've also been working on moving one of my pensions, a defined contribution one.
It was all going swimmingly, and seemed well down the process with Hargreaves Lansdowne, until the current provider suddenly determined that because the GMP element exceeds £30k, I need an IFA. HL then dropped it like a hot brick.
I have queried this with the provider on the phone more than once and they really don't sound convincing.
The PensionWise website says you must have an IFA to move a
"defined contribution pension worth more than £30,000 with a guarantee about what you’ll be paid when you retire (eg a guaranteed annuity rate)"
Is the general consensus here that that includes a GMP element in excess of £30k?
Only IFA's are quoting 2% + to move the pot, which I'd sooner not pay!! Plus I will have to pay the provider to provide a more up to date CETV. Those two costs more or less wipe out the £9k excess GMP which is in question!!!
I would have asked PensionWise except the soonest appointment I can get is late April and the IFA is coming to see me tomorrow :-)
Last edited by: smokie on Mon 26 Feb 18 at 12:32
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This is perhaps where having a longstanding IFA pays off. If he has known and advised you for years, and has a clear appreciation of all your finances having acted for you for decades, then surely he is likely to appreciate your good reasons for moving the pension?
Obviously someone pulled in off the street just to rubber-stamp this one transaction will have to roll out the stock advice - don't do it - but you'd have thought that if the move does make sense, in your particular case, then a a good adviser having all the facts would see it too?
And if you can't convince even your regular adviser, then perhaps he is right?
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Yep, but I don't have a regular adviser. I think that many IFAs back off pension move advice to another organisation, as it is a specialist field and they see risk everywhere (primarily of someone suing them at a later date when they've cashed in their pension and lost the lot on dodgy investments).
However my latest query was about whether we thought it was essential to have an adviser in a particular set of circumstances which, without the £9k GMP, would not have legally required an adviser.
Since I posted the pension have come back and absolutely confirmed that I DO have to have an adviser. So the £9k which causes the issue will nearly all be swallowed up in IFA fees (initial quote is something over £8k to move it). It's £9k GMP not £9k per annum.
Daft and over-bureaucratic.
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>> Only IFA's are quoting 2% + to move the pot,
I know of people/colleagues that have paid a fixed price to move their final salary pensions and some have been more like £1M.
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I read that it's supposed to be a fixed price but I can't find any IFA who does that. If you could find a recommendation I'd be grateful.
Another complication has arisen - the aborted move to HL caused one valuation request (CETV) to the provider. I'm only allowed one per year apparently. The IFAs seem to want one with some time left to run - they "expire" at three months. The provider says they only do one per year. Can't even pay for another apparently.
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Someone comes into the offices regularly and I'll go to see them at some point - but this is Manchester.
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Unless your old pension provider is criminally useless, I can't see that any small financial improvement is worth this much hassle.
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I have no choice other than an annuity if I stick with the current provider. There's all kinds of reasons why that's not desirable. And in the meantime they only offer a choice of 9 funds in which to invest.
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Moving pensions - Bromptonaut
