Pension transfer - anyone used a financial advisor?

[YogaLite]

I want to transfer my old deferred defined benefit pension to a different government approved provider to have more flexibility to access it.

There is a (totally unnecessary in my view) obligatory requirement to obtain a financial advice which apparently is expensive.

I had sent some enquiries online and I am waiting to hear.

Has anyone done it? How expensive was it? I just need a one-off waffle from them confirmed by a letter to my pension provider.

Anyone has been through similar? How did u find the "advisor" and what was the cost?

I know a lot of IFAs simply won't advise re transfers out of defined benefit schemes due to the risk of future claims against them which are very common when people come to retire later in life and find out they'd have been better keeping the funds in their original pension schemes, so you may struggle to find someone. They're also very time consuming as the IFA will have to properly research both the current and proposed pension scheme rules and then explain the pros and cons to you so that you make an informed choice. So I'd expect their charges to be a few hundred pounds at the very least.

I just need a one-off waffle from them confirmed by a letter to my pension provider

There's a bit more to it than that nowadays and very stringent guidelines laid down by the regulator as to the circumstances under which a transfer may be deemedto be in a member's best interests. Very high risk area of advice and correspondingly high costs thanks to complexity of work involved and high PII cover costs.

Depending on your Cash Equivalent Transfer Value, expect fees to be at least £3k to £5k or more.

Not quite sure what you mean by 'government approved provider'. That's not a thing.

Thanks guys. Depressing
Government provider as in NEST.

Lots of threads on this on the Money Saving Expert pension forum.
A couple here:
forums.moneysavingexpert.com/discussion/6334395/tiny-almost-forgotten-pension-offers-cetv-of-175k-need-ifa/p1

forums.moneysavingexpert.com/discussion/6312474/defined-pension/p1

I was £250 to register with a new financial adviser. This was money I had to spend in order to sort out a complete and utter shambles of an "investment" that had been set up by another financial adviser who is no longer allowed to practise

Thank u.
I am starting to think it's all invented to feed the financial sharks and vultures it's not like they have a crystal ball

I wish they let individual to decide what they want. There is no way I would ever be able to draw the amount I have in my deferred pension in fu unless I transfer it out.

@YogaLite

Thank u. I am starting to think it's all invented to feed the financial sharks and vultures it's not like they have a crystal ball

I wish they let individual to decide what they want. There is no way I would ever be able to draw the amount I have in my deferred pension in fu unless I transfer it out.

It's really not, there have been some awful cases of people being wrongly transferred out of defined benefit schemes

It's for your own protection, why do you think it's a good idea?

@YogaLite

Thank u. I am starting to think it's all invented to feed the financial sharks and vultures it's not like they have a crystal ball

I wish they let individual to decide what they want. There is no way I would ever be able to draw the amount I have in my deferred pension in fu unless I transfer it out.

Why do you think you’ll never access your pension in full? Are you taking into account inflationary increases on that pension which will mean what you receive in retirement will be higher than what it says now?

@FrownedUpon, thank u for the links, I had missed them when I first looked.

It all makes pretty miserable reading, another "project" I could have done without.

The reason is it so difficult is that it is rarely in anyone’s best interest to give up a guaranteed, index linked income for life. The chances of you changing your mind later on and trying to seek recompense from the FA is high and the insurance they need is very expensive as a result.

Generally the only reason it might be a worthwhile is if you have a specific reason such as a life shortening condition.

@Haus1234, because it's an old deferred pension based on my final salary decades ago. In payment it will be peanuts and wouldn't be enough for our new electricity bill so I'd rather have it sooner as a flexible drawdown than live till 90s.

What's the value of the pension you want to move? If it's really that small and worth less than £30k you don't need the advice to transfer (IIRC)

@Chewbecca

The reason is it so difficult is that it is rarely in anyone’s best interest to give up a guaranteed, index linked income for life. The chances of you changing your mind later on and trying to seek recompense from the FA is high and the insurance they need is very expensive as a result.

Generally the only reason it might be a worthwhile is if you have a specific reason such as a life shortening condition.

Or if you're single and the DB pension has in built spouse's pension costed into it.

That’s not a reason to approve a transfer bonnesvacance. It is still usually a very good deal.

The transfer value is over 30k.

Good to know about the conditions, not single but my oh is older than me and probably even less likely to benefit (from less than half the peanut).

I just now need to find an advisor, one I approached only deals with £250k+ transfers...

Having a full portfolio of other varied income sources also can be considered, to evidence you are not reliant on the stock market alone (E.g. another DB pension or investment property).

@Chewbecca, so happy u mentioned it, this would be relevant and no, I wouldn't be relying on stock market.

I just want access it flexibly sooner rather than later.

Plus, in all honesty, who ever cares whether we can afford cost of living as it is. Yes, we would sell the house if needed - wouldn't everyone?

I googled based on location and picked www.suttonbrookwm.co.uk/
Not sure about transfers but recommend for fast responses and easy explanations 😌

Many thanks @hopeful, I will make enquiries today

One off waffle 😭

So you don’t also want them to have indemnity insurance so you get a payout if DB transfer out is the PPI of the next decade? Because that’s actually why a lot of IFAs don’t offer transfers - it’s so likely to be a mistake that the insurance is sky high.

Personally I’m a fan of personal responsibility and think you should be allowed to do it, and sign away any come back. Bet you’d be the first in line to complain you should have had more than a one off waffle provided when others are getting their compensation though.

I would be very happy to accept a responsibility and sign a disclaimer.

Any dispute wouldn't be worth the stress for the rest of my life.

No-one has a crystal ball and ~£200 p/month wouldn't be enough even for my new monthly electricity bill so I'd rather have flexible access and use it as needed.

I expect I have enough factors to justify the transfer but hey, I first need to cough up £k's for someone to put it in print after I told them 👿

If a transfer is recommended the fee will usually be taken directly from the transfer monies when they are invested in the new arrangement. If the advice is not to transfer, the fee will be payable by you directly plus VAT.

Some firms will offer an Abridged Advice service, maybe even at no cost, which may be a sensible first step for a steer as to whether or not a transfer would be supported.

You can thank the FCA for banning contingent charging as the reason why you cannot just get a simple off-the-record type of indication from an adviser.

Does your DB scheme offer you the option of a tax free lump sum plus reduced annual pension, or just the ~£200pm?

Have you checked on what basis the payment is uprated to allow for inflation, while it is deferred? That may be of significant value now we appear to be entering a higher inflation environment.

(It has recently been pointed out to me that a tiny deferred DB pension I built up 20 years ago may be worth slightly more peanuts than I initially assumed)

@Sunseed, thank u for your comments. I will try abridged advice but right now I had no reply to my messages.

Yes, there is an option of lump sum of c.20k and ~c.200 p/mth after that.

I don't understand why I can't sign a disclaimer that I am taking full responsibility for my decision? I mean, whatever any financial advice would come up with, things can change it very quickly and no one has a crystal ball.

@Pythonesque (love the nickname!). Yes well, similar really, the value of my transfer is higher than I was expecting, but it doesn't buy much as pension.
I haven't got it to hand but I recall 3% was mentioned there somewhere, I would need to get to my papers.

Advisers can no longer get away with unsuitable advice by getting their ‘victims’ to sign a waiver. The adviser is and always remains liable for the advice. That’s why they cannot just tick a box on a piece of paper.