I transferred both mine and my wife's pension 2 years ago. We made the right decision as my wife passed away recently aged 52. Cancer will affect most of us. So if you get a large amount, take it.
Hi Andy thanks for commenting on our Chanel! I am sorry to hear about the passing of your wife our deepest sympathies to you and your family and your absolutely right it’s the preparation that’s key to a peaceful retirement. How are you getting on with things?
@@cameronjamespensiontransfer Hi Cameron, we're still struggling with no having her around, she was an amazing wife and Mum to our boys, only time will hopefully heal some of the pain we're going through. Thank god we don't have to worry about money.
This is a perfect example of how DB and DC transfers are more than appropriate for many families. We appreciate the FCA doing all they can to protect people, but sometimes the pendulum swings too far, and it can actually harm investors! Are you currently managing the assets within a SIPP yourself or via an IFA?
@@cameronjamespensiontransfer not had a chance to do anything yet as I've been so busy sorting my late wife's estate. I don't really know what to do with it yet.
@@abc908 we can imagine. Dealing with finances is a difficult area when someone has passed away. Is the policy still in her name or have you taken steps to transfer the ownership of the account? Here to help if you need anything!
The CETV multiple, how good a ‘deal’ a scheme have offered is actually only one of numerous factors. And it is not the most important factor by some way considering the suitability of a transfer for an individual. A client with a lower multiple could well be advised if their rationale and suitability was correct. While someone with a very high multiple could easily be advised against! What is your current situation with your CETV?
The costs of FCA DB reports are certainly rising, however, to say people can’t transfer is not always the correct advice. And even still, clients have the statutory right to be an insistent client, should they wish to. In which country are you based?
@@BigAl63 very interesting, we are currently transferring two DB’s at Rolls-Royce. One of them have a CETV expiration of 30th October and the client only got in touch last week, but we contacted RR and they agreed to extend the CETV by 4weeks until 30th November, so we are now getting this one done for our client. The RR scheme is a good one, the transfer decision will be based on your own situation though. We have transferred many RR schemes when appropriate. We will complete an Abridged Report for you for free for you to understand your options. If you want to have a quick 15 minute chat free of charge, you can book in here: calendly.com/dominic-james-murray/quick-chat-15-mins-clone
Final salary pensions when west some years ago so maybe rephrase your wording. Final salary were just that, so I’d assume somewhat better than the 15k you mention near the beginning. Anyway I went SIPP to avoid annuity’s, I didn’t want to see my funds swallowed you a pension fund and leave something for my wife and kids better than 50%. I have the control I wanted over my funds, so semi retired at 58 and drawing down some funds but flexible to be able to reduce if required.
What did you mean by rephrasing the wording, Stafford? It is certainly true that Final Salary pensions are not as strong as they used to be from a financial standpoint. Many schemes have huge deficits and underfunding issues, and it is hard to see where the capital will come from to plug these gaps. This is an unpopular decision at shareholder and board level to repay DB deficits instead of paying annual dividends to shareholders. As unlike the UK state pension (which is also severely underfunded) DB schemes typically have no new contributions being paid in. The UK Gov can at least pay those in retirement with new contributions from the current working cohort. Utilising a SIPP, to avoid being forced to take an annuity, is one of the most common reasons clients transfer out. An Annuity will often push people into a higher tax bracket than they would so like. However, the FCA will rarely see this alone as a valid point for moving from DB to SIPP. Passing the full 100% onto beneficiaries (instead of the typical spouse 50% benefit) is likely the second-biggest driver for most of our DB clients. They feel like they have an albatross around their neck and that their pension will not fully benefit their family in the event of their death. Having full control over funds via flexible access drawdown is again another top reason. The FCA view this rationale point more favourably, as if someone can demonstrate that they cannot achieve their retirement goals with their existing DB with a Normal Retirement Age (NRA) of 60 or 65, then a SIPP is more suitable for their needs. How did you find your transfer, Stafford? What advice would you give to people reading these comments just embarking on the daunting process?
Hi Cameron, only that a final salary pension as I knew them were just that, if you were with the company long enough and you retired on 45k then your pension was 45k so to me it’s just a pension now. That option died at Avon tyres in the early 90’s for new staff. Apart from not liking annuities my pension looked as though it was going to stagnate where it was with little investment from the holders, so along with previously stated reasons I SIPP’d out. The process was thorough to ensure I was a good candidate for this option, due to CV19 it did take a long time. Having just found a financial advisor I also did research with the FSA to ensure my FA and the investment company were legit and had some reasonable history, so far so good and the fund is supporting my current level of drawdown. My next option is to invest my other two pension (not final ;-) pots and look at making a 25% tax free (as I understand) one off withdrawal. Putting this to one side to draw from if I need to lower my monthly drawdown and also avoiding tax on it. Regards S
Hi Stafford, OK gotcha! Yeah unfortunately there has been a watering down of DB benefits over the past few decades. You only have to read the UK Government white papers and consultations to see where DB’s are heading. So while they are ‘gold plated’ in many requests, there are also huge systemic issues in the whole system which will undoubtedly get worse with an ageing population. Sounds like you have a proper financial advice process, so credit to your IFA. Transfers are not suitable for all so it does take real analyse. If you ever want a free comparison, we’re happy to provide one. We typically use the AJ SIPP 0.20% and all in (platform, IFA and funds) a net cost of 1.55%. And our balanced clients have 5-yr annualised return of 13.63%. Yes, that’s right 25% PCLS! The way the market I going I wouldn’t be surprised to see DBs almost becoming impossible to transfer within the next 24-36 months! Dominic
Hi Mark, we provide the full FCA DB report and end-to-end transfer. You can book a free Zoom consultation in my diary here: calendly.com/dominic-james-murray/initial-consultation
@Mark glad to hear you have been successful in the DB maze! The fun and games will unlikely be over just yet with the UK ceding scheme though ;) Get your Birth Certificate ready on hold, this is a classic delay tactic from DB schemes!
@@cameronjamespensiontransfer Under Reason to Keep DB - you need to mention Inflation Protection. Massive atm. The reason DB schemes drop to 50% for Spouses - is because there is then only 1 person - you are now dead. The purpose of the DB Schemes are to have defined/GUARANTEED, NO risk benefits for you (and your Spouse) - for EVERY year, for the rest of your life. The reason the company want you out of the schemes and are paying larger multiples is because you are likely to live longer and they don’t want to pay Inflation protected Pensions way into the future. They want you to be greedy, and take the money, and take the risk. Plus you pay for financial advisors every year for the rest of your life too. DB schemes are being phased out for a reason - they cost the company too much - don’t convert it to DC (unless you are not likely to live long or have no spouse) without serious thought.
@@wl660 Great comment. That is true, inflation is currently running at a high level. It is also true that many schemes offer higher multiples to encourage people to leave to reduce their liabilities. It is also correct that you will have to pat for financial advice. All of these things you have said are accurate. However, they only paint one side of the story. It is important to remember that not every individual should stay in their DB, and not every individual should transfer out. It sounds like remaining in your DB is the right approach for you. The annual returns of nearly all DB schemes dramatically underperform world indexes such as the S&P500 over the past 30 years, which has averaged 10% pa. For many clients, they may wish to grow the DB capital as much as possible and do intend to even use it in retirement and instead pass it onto beneficiaries free from IHT. We have many clients with whom we have worked for 5-years and compared their SIPP performance with us Vs the DB scheme performance. After a few years, they then decide to also transfer the DB as the growth is higher. This does obviously mean taking risk, though. Every individual should complete a thorough analysis and make a decision that is correct for them. For many, this will mean remaining inside your DB scheme! Do you see the value in any of these points, and how transferring might be suitable for some individuals?
@@cameronjamespensiontransfer Good video btw, but I did feel you had steered things a specific way (which encourages people to take the first step in paying for a financial advisor), hence my balancing the views with very relevant bits. It’s fair to say you benefit hugely from fees where otherwise none would be due. I think if a couple have two DB pensions - taking the money from one and having a go at investing it may work out. And might mean the money stays in the family on passing. And in this case, all eggs are not in the same basket. But if the couple only have one pension, then the risk is very different. I have concerns over the Finance Industry having a terrible mis-selling reputation - and think this is the next one for the Lawyers to get their teeth into.
@@wl660 Thanks for the feedback. All your comments were relevant and helpful. And yes, you are correct, we have built a business around helping people with their DB transfers, and we benefit from DB fees. However, we are not greedy. We will be in this market over the long term. We were one of the first International IFAs to offer fully transparent fees and charges, before it became popular. Another thing we do at Cameron James is actually reviewing a client's DB situation for free and tell them at an early stage (without any fees) if we do not think a DB transfer is in their best interest. We recommend this to around 40% of all new enquiries we receive each month, as a transfer is unsuitable for them. A minority of clients even get angry at us, and tell us we have wasted their time, as they want to transfer. But the majority value this, and we actually have a few Google Reviews from people saying 'thanks for the initial layman opinion that transfer would not be suitable for me'. For the remainder, where a transfer may well be suitable for them, and we help them go through the complicated FCA process that they must follow, to make an informed decision on what is best for them and their family. I 100% agree. The Financial Industry is rife with mis-selling as IFAs have more information than clients and bamboozle them into decisions which are not in their best interests. I am fuming when I take over a client who has been mis-sold elsewhere and then joined us. It is also extremely short-sighted from the IFAs. Taking large upfront commissions and high ongoing charges, is completely stupid. OK, they make more money in the short term, but over the long term they have no business model and a terrible reputation and the client's portfolio never grows. If you actually help the client achieve 5-10% annualised growth rates, you manage a large amount of money for them and increase your annual fees while increasing their wealth. This is hos an IFA-Client relationship should work. These clients then refer and recommend you to many friends and colleagues. Sorry, rambled a little there, but an area we are passionate about. I have also done Videos such as 'Top 5 Reasons NOT To Transfer Your DB Scheme' for those 40% of people to educate themselves and not even get into the advice process.
Hi Tony, certainly. You can either drop me a call on 07870817830 or email me directly at dominic@cjfinance.co.uk. If by email kindly provide a summary and any relevant pension info for me to review. Speak soon. Regards Dominic
