moving from a DB scheme

A question about : moving from a DB scheme

I have a frozen private pension of (frozen since 2000) with a transfer value of Ј500k and an estimated pension payable of Ј15k at age 60yrs.

I also have another final salary public sector pension also estimated to be cЈ15k when I am 60yrs.

I am single with a teenage daughter going to uni and will shortly be 55years. I am a 40% taxpayer. I want to move my private pension into a DC scheme so I can access funds. My intention is just to take the 25% tax free lump sum to fund uni exps, house renovations and pay some of mortgage and will drawdown the rest when I retire in 5 _ 8years time,

I have seen a financial adviser who accepts that I want to release funds so they are accessible to my child if anything happens to me.

However he has recommended a fund, which if you take account of his 2% set up fee Ј8k, plus a monthly management fee of.75% plus fund managers fees we are looking at 4% in the first year just in fees alone.

I am worried costs will outweigh growth.

I am looking for a low risk, low cost DC pension plan - thoughts please. Also which companies will accept a transfer from a DB to DC plan.

Thanks in advance

Best answers:

• https://forums.moneysavingexpert.com/...=#post66533848
  might be of interest.
• Thank you xlophone
• Hi Pensionsnewbie!
  You have set out some obvious reasons why you would wish to access your pensions and the new rules/proposals should certainly be investigated in your situation. I would suggest that you consider the following:
• The work involved in pension transfers, particularly from defined benefit/final salary schemes should be carried out by an expert
• There are many variables to consider and this level of advice will obviously come at a cost
• It may not actually be advisable and there may be other options for you to consider
• You could negotiate a fixed fee as opposed to a percentage
• There are a huge number of options for investments and you should seek independent financial advice on this. This is a significant consideration as your money is likely to remain invested for some time.
• It is such a lot of money it would take a long time to draw down and may be needed to provide you with income right through your retirement it will be worth having an ongoing advice relationship in place
• As the arrangement is likely to be in place in the longer term any initial fees will have a reduced impact as time goes on and can be recovered by investment growth. Adviser should provide illustrations to demonstrate this clearly for you.

I do hope this help - please do come back to me if you want any further questions answered

• Hi just to add to this - you need to check on the information given regarding something technical called a reduction in yield or additional growth needed.
  This will show you how much the fund in the new pension needs to grow by in order to (estimated of course) be the same as your DB pension.
  Can I strongly suggest you do not do this (if you haven't already!)