• Welcome to DOSBODS

    Please consider creating a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

Sign in to follow this  
I'll Handle it

Switching over a pension.

Recommended Posts

Just now, One percent said:

Are you married?  o.O

:D

It's a hypothetical example; I used £10k to make it easy.

I don't actually know how much I have hence my paying out for a review; this is a required precursor to any transfer which then comes with its own fee.  My previous approach was just to let them start paying at 65 or 67 but I think that I will be missing an absolutely massive opportunity by so doing.  I may not be able to grasp that massive opportunity but I'm certianly going to have a go.

Share this post


Link to post
Share on other sites
2 minutes ago, Frank Hovis said:

:D

It's a hypothetical example; I used £10k to make it easy.

I don't actually know how much I have hence my paying out for a review; this is a required precursor to any transfer which then comes with its own fee.  My previous approach was just to let them start paying at 65 or 67 but I think that I will be missing an absolutely massive opportunity by so doing.  I may not be able to grasp that massive opportunity but I'm certianly going to have a go.

Good luck with it. 👍

Share this post


Link to post
Share on other sites
1 minute ago, One percent said:

Good luck with it. 👍

Cheers. I will of course report back.

I am however aware that pension regulation is a minefield and every scheme is different so whilst I may end up either not being able to do it or only able to do it in a small way the possible chance of doing it across the board puts it into lottery win territory so I have to attempt it.

As with anything like this the rule is always: get in first.

Share this post


Link to post
Share on other sites
Just now, Frank Hovis said:

Cheers. I will of course report back.

I am however aware that pension regulation is a minefield and every scheme is different so whilst I may end up either not being able to do it or only able to do it in a small way the possible chance of doing it across the board puts it into lottery win territory so I have to attempt it.

As with anything like this the rule is always: get in first.

I take it from upthread that I can’t do it with my db pension 

Share this post


Link to post
Share on other sites
2 minutes ago, One percent said:

I take it from upthread that I can’t do it with my db pension 

Yes you can; that's specifically to what I'm referring by the multiplier: it applies to the annual DB income stream on retirement.

The benefits to swapping out DC schemes into SIPPs are much more limited - you invest in what you want and pay lower fees.  Plus no need to take an annuity at the current pathetic rates which are the fllipside of the multiplier I'm hoping to obtain.

I have 5 DB and 1 DC.  If I can I'm taking them all out as lump sums transferring into my SIPP.

Share this post


Link to post
Share on other sites
Just now, Frank Hovis said:

Yes you can; that's specifically to what I'm referring by the multiplier: it applies to the annual DB income stream on retirement.

The benefits to swapping out DC schemes into SIPPs are much more limited - you invest in what you want and pay lower fees.  Plus no need to take an annuity at the current pathetic rates which are the fllipside of the multiplier I'm hoping to obtain.

I have 5 DB and 1 DC.  If I can I'm taking them all out as lump sums transferring into my SIPP.

Ok, ta. Be interested to see how it goes. I have two defined benefit pensions which I could take now if I was willing to take the hit 

Share this post


Link to post
Share on other sites
12 hours ago, MrXxx said:

Not sure if I have this right DB, but you are saying that your DB pension gives a higher weekly sum if you relinquish the option of passing it on to a spouse on your death OR is it just the buy out/transfer value that allows this option?

Hovis, think you make a good point about current low IR and their eroding potential on the weekly  pension sum if they raise in the future (and especially if the T&C have limits I.e .5% increased indexing above 5%) BUT there are unknowns to a buy out. Would a better compromise (to account for the unknowns) be taking the pension early and investing the sum in S&S?...that way you are not paying the pension company their management sum but still have the guarantee of a fixed income for the rest of your lifetime to fall back on?

Transfer value is the same,if i take the DB pension i can get more if i give up the spouse bit.In affect if i take it at 55 without a spouse pension its the same as taking it at 60 with one.

Share this post


Link to post
Share on other sites
28 minutes ago, Frank Hovis said:

Yes you can; that's specifically to what I'm referring by the multiplier: it applies to the annual DB income stream on retirement.

The benefits to swapping out DC schemes into SIPPs are much more limited - you invest in what you want and pay lower fees.  Plus no need to take an annuity at the current pathetic rates which are the fllipside of the multiplier I'm hoping to obtain.

I have 5 DB and 1 DC.  If I can I'm taking them all out as lump sums transferring into my SIPP.

Let us know Frank how you get on and who you use.Way i see it is if you can take £12.5k a year from SIPP from 55 to 65 (or state pension age) thats great.Running SIPP down in a tax efficient way means you can run up other tax wrappers like ISAs.I got offered £130k transer,£98k of it was DB for a £2.3k a year index linked pension.£30k was a part in money purchase.My fund who honour it,some that are under funded refuse the full transfer value.My partner got one for £80k on a £3k index linked (but only CPI up to 2.5%).

 

Share this post


Link to post
Share on other sites
18 minutes ago, DurhamBorn said:

Let us know Frank how you get on and who you use.Way i see it is if you can take £12.5k a year from SIPP from 55 to 65 (or state pension age) thats great.Running SIPP down in a tax efficient way means you can run up other tax wrappers like ISAs.I got offered £130k transer,£98k of it was DB for a £2.3k a year index linked pension.£30k was a part in money purchase.My fund who honour it,some that are under funded refuse the full transfer value.My partner got one for £80k on a £3k index linked (but only CPI up to 2.5%).

 

That plus I would turbocharge it by taking up to the 40% band and then offsetting the 20% tax liability with VCT contributions at 30% and living off the difference.  Back of an envelope say £42k out, £6k tax, £20k VCT to offset that tax, cash in hand tax free £22k annually plus VCT dividend stream paying tax free currently about £8k giving £30k no tax no NI.   Bugger knows what I'll spend it on given my current outgoings are probably £8k but I do see depriving the government of tax revenue as a end in itself.

My aim is to have no pension funds ASAP by pouring them into ISA and VCT where there is no tax upon drawings and maybe a bigger house as I don't trust the government not to gouge them to pay for the shortfalls in things like the LGPS, Tata etc.  Ideally my only remaining pension at 67 will be the state one which I'm not allowed to sell but I'm sure that the buggers will start means testing; hopefully against other pension income being zero by that stage.

I am also highly concerned about pension funds' ability to meet their commitments owing to years of under returns and diminishing active contributors so I want out but am hoping that by jumping first I get decent transfer values.

The wheels are in motion so we shall see.

 

Edited by Frank Hovis

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.