Why You Should NOT Transfer Your Final Salary Pension!

Very informative. Thank you for doing the video from somebody who has an Electricity Supply Industry Final Salary DB pension. 👍🏼👍🏼👍🏼

The kicker for me was checking the numbers and finding that my piddly DB from the late 1990s is currently being upped at 5% a year until I'm 60 and then upped at 4% for the rest of my life. I thought I could cash it in and take the cash to a SIPP but if inflation stays under 4% then it's a "goose laying golden eggs". Only did 5 years at 12% non-contrib in the scheme, it's not far under the state pension amount so it will cover my basics and then take the strain off my SIPPS.

Well said 👏🏼

Hi. I have been watching your channel for sometime now. As I was very interested in transferring my db pension into one account. However I have changed my mind somewhat due to the reasons you outlined.plus… 1. Cetv values have been destroyed by government incompetence and world event. Negating any advantage a Transfer may have had pre 2022. 2. The draw down funds are generally poor performers, due to the advisers putting client on low risk portfolios over laden with bond allocation. ( I think personally that this is the next big scandal in the industry waiting to break.) 3. The fees taken out say 2% render the modest gains or losses even less attractive. I am sticking with DB pension, and would recommend anyone else do the same under current circumstances. Thx

Some great advice but a managed ISA or Pension at Vanguard only charges 0.3% management fee, capped at £380 ... it's a lot cheaper!

Exactly!

An additional question is: who has a ‘live’ DB pension these days? Most of them have been closed down some years ago with the scheme moving to DC. If you have one of those DB ‘hen’s teeth’ still active in the private sector then there’s probably no way it’d be worth transferring. However if not……..might be more likely to consider…?

Very good advice,it’s not for everyone and with the drop in values and performance of many DC schemes since covid,better returns can be gained from bank savings accounts. I deposited £10K in April gained tax relief of 2,500 fund has dropped £2K DB schemes added to state pension for many give a comfy starting position that any DC contribution can be the cherry on top

Hi. I have a pension from the USS which is a defined benefit scheme. I have accumulated a total of £12,000 in my pension pot, which will provide me with an annual income of £1,030 when I retire. I left the USS after switching jobs. I am unsure if I should keep my USS pension, transfer it to my current pension provider L&G, or move it to a SIPP with Vanguard. Can you advise me on what would be the best option?

I am 55 in 4 months and still considering it, despite the reasons you so clearly explain in the video. I had a CETV two years ago that was 27x the annual pension and would, even at modest rates of growth, allow my wife and i enough money to help our kids a little with house deposits etc and still be OK in terms of our expenditure. i am currently trying to understand the mechanism of growth ( RPI, CPI etc) for the pension before I start drawing on it. If the pot is currently growing at 10% pa it would be insane to transfer it now., particularly with the likely reduction in CETV multiplier. One question I have: if pension funds are having to fund these 10% inflation increases, would that not mean they would be more keen to get rid of the pension and offer a reasonable CETV? Hope that make sense? Thanks

The thing i have always thought is that if the Regulator thinks DB Pensions are so called “Gold Plated” and makes it virtually impossible to transfer out (even after paying nearly £20k) then why did they allow companies to freeze them and close them down? Mine is a so called “Final salary scheme” but yet was frozen in 2014. My salary has increased markedly in the last 10 years and yet i am expected now to live on a pension that is 25% of my actual final salary!

Toyed with the idea 6 years ago…….i didnt and im glad i didnt. Having the cushion of a DB pension, SIPP & current work pension plus SP is a good mix of pensions.