Low value DB pension transfer? Please sign a petition

[Tinsey]

Having battled unsuccessfully the problem of my low value pension transfer, I have created a government petition to allow an opt-out of the financial advice for low value DB pensions transfers.

There has been something in the news they are trying to simplify consolidation in 2030 but not sure I will live long enough as I am in my 60s (my pension transfer is about £100k but I was also told that most providers don't accept new funds under £250k).

Can I please ask you to sign and share if possible. I will also post it on MSE at some point but any ideas where else to go with it gratefully received.

petition.parliament.uk/petitions/652230

assisted dying grrrr autocorrect

As someone who actually knows something about pensions, I won’t be signing such misguided nonsense.

You know that a huge percentage of the people who would sign that would also want to pick up their bonus compensation pay out from “no win no fee: were you allowed to withdraw your DB pension without understanding what you were doing, and cluelessly not bothering to find out?” sharks in a few years?

I don't expect any FA's interested in signing it as it would take away a lucrative income stream from them.

I am rather trying to reach those with old lost/forgotten pensions nearing retirement who probably don't even realise that much talked about pension freedoms dont apply to them.

There is already an exemption for genuinely low value pension transfers.

Most people wouldn’t consider £100k low value.

It is also not in most people’s interest to transfer away from a DB scheme.

If you want to do it, pay for advice.

I agree with you! I have a dB pension which pays out about 1k a year, at one point the TV was nearly 100k and I couldn't touch it - I spoke to many FA and most had a minimum value of 100k. In addition to the 100k minimum they wouldn't advise full stop unless I was aged over 55 or terminally ill, so basically I couldn't access it. I want my pensions consolidated and to be able to invest how I see fit! The value has dropped through the floor now which is a shame but its such a waste

I transferred out of a low value dormant DB last year. Old DB from a job over 35 years ago that I worked for about 4 years, I got a transfer value of just over £40K so needed the proper FA advice. I found the advice helpful and can fully understand why it is needed given that there have been pretty awful examples of people transferring out of DB when it was very much not in their best interests. Yes it is a but if a faff and costs money on the FA fees but I understand why it's needed and I won't be signing the petition.

I would be gobsmacked it if the CETV really did have a multiplier of 100 x the annual payment. Are you absolutely sure? Perhaps the £1000py was at the date you left the scheme and needed to be adjusted for inflation? Are you receiving the pension yet?

I got the quote done multiple times as was so surprised at the value. No, I'm nowhere near retirement which is why no-one will give me any advice

What a terrible idea, I strongly encourage people not to sign.

No sorry. I won't sign. The vast majority of people will not be better off transferring out of a DB scheme.

Clearly you do not understand pensions and would benefit from good advice. You've just demonstrated exactly why I won't be signing. The requirement for advice is with good reason.

No FAs or people who only have a DC pensions need to be interested in this petition

It's about having an option, equality and choice - those who want advice can still do it at any point in their life but it's hardly fair on those who have got to almost 70, never claimed any benefits and don't intend to - to suddenly be treated like 18 year olds with no clue.

So is it fair for £1m+ DC pensions members to do as they please and not ok for people with small old pensions which have been frozen for ~30 years not being able to have the option to switch to DC? Where exactly is the logic?

The logic is that when people chose to be a part of the DB schemes, the rules were clear. If the rules change which may be favourable for some - happy days for them. But they have gained, rather than the other people losing.

Yep, let the bodies pile up and pocket the balance of old pensions for the benefit of pension funds - really good idea NOT.

But you can transfer out, I did - but had to go through formal process of FA advice and approval for my transfer, based on my circumstances and understanding of the risks of transferring away from DB. I agree that FA costs are high (as a proportion of the transfer value for small DB) but the rules are there as a safeguard after some terrible instances of people transferring out when this was clearly not in their interests. I get that it's frustrating but the current rules are there for good reason.

@Pedestriancrossing please PM me who you used, also how much it cost and was it recently.

Were you comfortable sending ID and bank statements etc to a stranger almost certainly working from home? Seems to me a bit of a risk.

Like @CCSS15 I was rejected even though I am at retirement age.

Sorry I don't seem to be able to PM but company was Haven Protect Ltd. Transfer completed in late 2022. Cost for FA advice approx £3.5K. I wasn't concerned re data protection as they use secure end to end encryption and must adhere to GDPR. Process took about 3 months start to finish.

I won’t be signing. Sometimes people need protecting from themselves.

Providing advice on DB transfers is risky for IFAs and the PI insurance premiums are extortionate. They also need specialist qualifications. Even though I was qualified it was an absolute minefield and one of the reasons I left the profession.

@Pedestriancrossing thank you, will try them next if the petition doesn't get us anywhere.

@Elphame I am surprised you left such a lucrative profession, maybe you left too early? £8k for one transfer of eg £100k is more than many people earn in a month (or maybe even 2).

And if you were to charge a % of the fund, then on £1m you would get £80k, no brainer if the same mandatory advice is introduced for DC pensions. Definitely better than doing a lottery or Premium Bonds.

You see, I am happy to take a risk and I have no plans for suing FA from behind the gravestone.

@Tinsey what is the transfer value of your DB pension and what retirement income will it provide?

It's probably about £80k now (was just over £100k a year or so ago) giving approx £1500 p/a.

OK so well above the £30k limited for non advised transfers. What is it you're actually trying to achieve financially with the pension transfer?

Were you comfortable sending ID and bank statements etc to a stranger almost certainly working from home? Seems to me a bit of a risk

What increased risk do you see here in relation to people who work in financial institutions working from home?

Are you sure the £1500py is what you would get now, is that a current quote? The multiplier doesn't seem right.
If you have a reduced life expectancy, talk to the DB pension provider, most will make a significant adjustment if that is the case.