OK, coming back to this advisor and the £10K fee in 2018 - was that shortly before the bereavement then him deciding to take the 50% reduction and TFLS?
I and others have explained DB schemes to you. There is no pot of money, just a TFLS if you want it, then a promise to pay £x a year for life. Once it’s in payment you can’t treat it like a piggy bank and ask for another lump sum. You get your monthly amount, that’s it. If you die, there’s probably a lower monthly amount for your spouse, but if you’re not married or they’re dead, that’s it: no more money.
If that sounds unfair, it works like that because the amount of money you get back over an average life post 65 is way in excess of what you personally paid in. So there have to losers for there to be winners, for it to be affordable. (and it’s not really affordable now because too many people lived too long - that’s why they changed it in - sounds like - 2008).
So back to your advisor fee.
Keep in mind that these DB schemes are really expensive, huge liability to pay out. So, it’s actually possibly to transfer out of them. The pension fund administrator can say, “see we might have to pay you £20K a year for 30 years, including inflation increases, at least £600K? Well how about you take £450K today, transferred into your own private pension - one of those DC just like a cash savings account? Then, we owe you nothing. You’re out of this scheme, we’ve paid a lot, but it’s done so we have no more risk of not knowing if we might end up owing you £600K.”
They can’t force, but they can offer.
For most people, it’s not a good deal.
But imagine you’re 55 and have a disease which means you expect to die at 60.
5 years of £20K a year pension then it dies with you (possibly a lower pension to spouse).
Or, £450K right now, you have to pay tax on it, but it’s all accessible. AND - when you die, your chosen beneficiaries inherit it without any inheritance tax! (special exception for pensions)
Now I’ve given an example where it’s a no brainer to transfer out. But the reality is, everyone’s situation is different and the sweet spot is hard to find.
The government recognised that too many people would see pound signs, take the transfer out, piss away the cash and end up poor at 60 without ever realising they’d fucked themselves over, giving up an amazing scheme. The only way to take a transfer is to move it to another private DC scheme. So the various rules ended up meaning that these private pension companies wouldn’t accept your transfer in, unless you had professional advice. They didn’t want to get involved in costly legal claims where people had been seduced by pound signs and taken the money when they really shouldn’t have.
My personal opinion: DB transfers is the next PPI claim waiting to happen 🤷🏻♀️ Sure some people were genuinely missold, but in the end a lot of people got compensation for their own stupid decision.
So if you wanted to transfer your DB pension in 2018, you’d have to get advisor advice. That is specialist knowledge and a lot of work - hence a £10K fee. But these specialist transfer advisors had to be specifically insured for that advice… and their professional insurance to cover it was going up. So £10K seems a lot for advice - but it was the going rate. There aren’t many that offer it now.
So, a big assumption on my part, but if you paid £10K in 2018 and we’re advised to transfer out then (a) that’s why the fee was so high and (b) I think you’re bloody lucky you were saved from yourself by the bereavement (though not lucky to be bereaved of course)
It sounds like your advisor was advising you on transferring out - or not. They weren’t there to tell you that you’d lose 50% by staying in and taking it early. It sounds like you feel you lost 50% even after paying £10K. But the two things are not related.