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Paying for IFA advice to transfer a 30k+ pension
john_r
Posted: 07 June 2017 23:03:21(UTC)
#84

Joined: 18/06/2010(UTC)
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I have only just somehow stumbled into this forum and I gasp at some of the contributions I have read. Hope I haven't misunderstood.

I'm not a pensions expert BUT in my honest opinion the pension changes bought about by George Osborne are dictated by :....

1. The goverment IS NOT trying to provide a path out for Defined benefit pension holders because in most cases the defined benefit represents very good value and some would say you are crazy (except in unique special cases) to transfer out.

2. The goverment IS trying to give alternatives for the holders of defined contribution type pension pots (eg stakeholder / private pensions or company schemes which do not give a guaranteed benefit). The reason is that interest rates collapsed after Gordon Browns credit crunch. Goverment long term (15 year ) yield also collapsed. This means that normal annuity rates will be severely reduced for anyone forced into this route. So much so that the holders may be better off either withdrawing the money or transferring into a SIPP - if they have the financial nous to make it a success.
This advice for these type of pension holders is provided free.

I am not surprised that IFA's are reluctant to advise your defined benefit pension to be transferred out. Because you're most likely better off staying in.

PS: going back to the opening messages in this blog - I also believe HMRC do a fantastic job and will always give good advice about tax but obviously not about pensions.
1 user thanked john_r for this post.
Tim D on 08/06/2017(UTC)
xcity
Posted: 08 June 2017 18:57:31(UTC)
#85

Joined: 12/04/2015(UTC)
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john_r;47713 wrote:
in most cases the defined benefit represents very good value and some would say you are crazy (except in unique special cases) to transfer out.
...
interest rates collapsed after Gordon Browns credit crunch. Goverment long term (15 year ) yield also collapsed. This means that normal annuity rates will be severely reduced for anyone forced into this route. So much so that the holders may be better off either withdrawing the money or transferring into a SIPP

It is precisely because interest rates have crashed that some defined benefit schemes are offering massive multipliers to members who transfer to a SIPP (or other pension).
This can be a good thing for those who would prefer to follow a different investment strategy (eg stay mostly in equities) or who have doubts about the long-term guarantees being offered. Particularly true for those who have other defined benefits and will then end up with a mix of defined benefit income and income from SIPPs.
Julie Brown
Posted: 09 June 2017 15:36:14(UTC)
#65

Joined: 09/06/2017(UTC)
Posts: 1

Little Jimmy Johnson;44119 wrote:
I recently transferred a DB (final salary) pension.

IFAs don't all charge the same, some charge much more than others so shop around. Many will charge a particular price for a completed transfer, but significantly less if you decide not to go ahead after seing the Transfer Value Analysis report or their recommendation. So ask what their costs would be at each step of the process.

Also, even if the IFA recommends you do not transfer, you can still go ahead (although it may not be wise to do so). Your DB pension provider will not stop you as long as you have evidence of advice (typically a declaration letter/form from the IFA saying they gave advice and are qualified to do so). The receiving pension provider does need to agree to accept a transfer, some require a positive recommendation, others only require that advice was taken, so again, shop around.

LJJ


As I have the paperwork from my provider for DB pension (for transfer purposes) I only want to pay for a TVAS - to advise for or against. I do not want to pay someone 3% of my pension pot to do the paperwork for the transfer. Are there FA who will do just the TVAS?
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