Boring Thread Alert!!! (Pension advice needed)

[cosanostra]

As ever, Kickback is a good place to start finding out some info. on a subject that I know **** all about.

 

Hopefully, a friendly and wise fellow Hearts fan will give me some help.

 

Here's the thing -

 

I worked for HBOS for 5yrs between 2000 and 2005 and was a member of their final salary pension scheme throughout that time. I therefore accrued 5 years of pension contributions.

 

What I want to know is, should I leave that where it is, should I try and transfer it to my new employer (NHS Scotland) pension scheme or should I look into taking out some sort of private pension scheme of my own and transfer whatever funds I have, into that?

 

Any knowledge or advice will be appreciated.

 

Apologies again for the terrible, dull thread.

[kitster]

Is your new scheme final salary too? I transferred my last pension pot (annuity based) to my current pension (final salary) - in return my employer gave me so many years/ months/days extra service to contribute to my new scheme. This obviously means when you are of pensionable age you have extra service to calculate what your pensionable income and lump sum will be.

 

This was my preferred option as it's easier to manage but you'd possibly need to find out more information before deciding. As i work for local govenment it was a no brainer really.

[Auld Reekin']

As ever, Kickback is a good place to start finding out some info. on a subject that I know **** all about.

 

Hopefully, a friendly and wise fellow Hearts fan will give me some help.

 

Here's the thing -

 

I worked for HBOS for 5yrs between 2000 and 2005 and was a member of their final salary pension scheme throughout that time. I therefore accrued 5 years of pension contributions.

 

What I want to know is, should I leave that where it is, should I try and transfer it to my new employer (NHS Scotland) pension scheme or should I look into taking out some sort of private pension scheme of my own and transfer whatever funds I have, into that?

 

Any knowledge or advice will be appreciated.

 

Apologies again for the terrible, dull thread.

 

 

For what it's worth, from my own experience and that of friends and colleagues, I would think very carefully indeed before moving your pension to a private fund as there is the potential to sustain heavy losses if you are poorly advised or if the circumstances with the fund change.

 

Initially, what I would do is to speak to whoever deals with staff pensions within HBoS and try and get as much information about the fund, and what you would get out of it at retiral, as you can. Then, do the same with the NHS pensions advisor and see how the two funds compare. You could always consult an IFA - this should be free and I can recommend (well, sort of... ) someone if you need this - but bear in mind that they will try and steer you towards a private pension fund as they won't make any money from you if you stay in an emplyer's fund.

 

To sum up, I'd probably go for the NHS one - if it looks OK - as HBoS are bernie-flint and you'd be less exposed that way than with a private pension!

 

[cosanostra]

Is your new scheme final salary too? I transferred my last pension pot (annuity based) to my current pension (final salary) - in return my employer gave me so many years/ months/days extra service to contribute to my new scheme. This obviously means when you are of pensionable age you have extra service to calculate what your pensionable income and lump sum will be.

 

This was my preferred option as it's easier to manage but you'd possibly need to find out more information before deciding. As i work for local govenment it was a no brainer really.

 

The NHS one is indeed final salary.

 

 

For what it's worth, from my own experience and that of friends and colleagues, I would think very carefully indeed before moving your pension to a private fund as there is the potential to sustain heavy losses if you are poorly advised or if the circumstances with the fund change.

 

Initially, what I would do is to speak to whoever deals with staff pensions within HBoS and try and get as much information about the fund, and what you would get out of it at retiral, as you can. Then, do the same with the NHS pensions advisor and see how the two funds compare. You could always consult an IFA - this should be free and I can recommend (well, sort of... ) someone if you need this - but bear in mind that they will try and steer you towards a private pension fund as they won't make any money from you if you stay in an emplyer's fund.

 

To sum up, I'd probably go for the NHS one - if it looks OK - as HBoS are bernie-flint and you'd be less exposed that way than with a private pension!

 

 

That sounds like a reasonable idea. I'm going to try and get in touch with an NHS pensions person today and see what they say. The HBOS lady said that I'd get 25% of the fund as a lump sum on retirement and the rest as a monthly payment. 5 years is likely to be very little though so it might not be a bad idea just to lump them in together.

[Beverley]

you'd need to check with the new scheme as you might not be able to transfer it. some places don't take money from final salary schemes, or indeed occupations schemes.

 

there are a few folks here who work in financial industry better equipped than me to talk about it though.

[Auld Reekin']

General principle is not to transfer from a final salary (defined benefit - you know what you are getting at the end) into a personal pension (defined contribution - you know what is going in but what comes out depends on investment performance - i.e. it's your risk).

 

There can be valid reasons to transfer out of a final salary to a defined contribution scheme but these are few and far between and you would need to be getting an exceptional deal on your transfer value for that to be the case, you may also be giving up valuable benefits like more than 25% tax free cash entitlement which you would lose if you transferred.

 

It could be worth your while to transfer from one final salary to another but would depend on balancing up what you are giving up in scheme A and what you are getting for it in scheme B.

 

As I mentioned above, generally it's not a good idea to transfer out of a final salary but I would certainly recommend you get advice.

 

In reply to the comment above re free advice, a financial adviser will almost certainly not give you advice for free unless it's a mate/relative. Why should he/she? Would you expect to walk in off the street and get free advice from a lawyer, accountant, tax adviser etc?

 

If they did recommend a transfer, they may get some commission from it which would mean you didn't have to pay a fee but if the recommendation was to leave things as they are they would charge a fee - regardless of the advice, the analysis and work has to be done!

 

In this day and age, an adviser will not make a recommendation purely becuase he will get commission if it's not the right recommendation, and if he did would be struck off by the FSA right away.

 

Also, having more than one pension is not a bad thing, you might want to go part-time one day and take one of your pensions to make up for the loss of wages, then take the rest of your pensions when you properly retire.

 

Hope this helps.

 

By the way, I'm a plumber, honest!

 

That's not been my experience. As I understand it, IFAs can make their money in two ways: either by charging the client for their time and advice and by offering a stock-broking service, or by the commission gained on any policies or savings / investment plans that they set-up for you. In the latter case - and I can certainly provide the name of an IFA / company that will do this - any initial advice you sought from them would definitely be free, as would the subsequent annual reviews of your portfolio if you went through them.

 

I believe that there are to be further regulations as to who can operate as an IFA and in how they conduct their business, but I'm confident that what I've stated above gives a broad outline of the situation.

[The Gasman]

By the way, I'm a plumber, honest!

 

A plumber that know how to look after his millions ?

 

No real surprise there.

 

......but an honest plumber ?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[cosanostra]

General principle is not to transfer from a final salary (defined benefit - you know what you are getting at the end) into a personal pension (defined contribution - you know what is going in but what comes out depends on investment performance - i.e. it's your risk).

 

There can be valid reasons to transfer out of a final salary to a defined contribution scheme but these are few and far between and you would need to be getting an exceptional deal on your transfer value for that to be the case, you may also be giving up valuable benefits like more than 25% tax free cash entitlement which you would lose if you transferred.

 

It could be worth your while to transfer from one final salary to another but would depend on balancing up what you are giving up in scheme A and what you are getting for it in scheme B.

 

As I mentioned above, generally it's not a good idea to transfer out of a final salary but I would certainly recommend you get advice.

 

In reply to the comment above re free advice, a financial adviser will almost certainly not give you advice for free unless it's a mate/relative. Why should he/she? Would you expect to walk in off the street and get free advice from a lawyer, accountant, tax adviser etc?

 

If they did recommend a transfer, they may get some commission from it which would mean you didn't have to pay a fee but if the recommendation was to leave things as they are they would charge a fee - regardless of the advice, the analysis and work has to be done!

 

In this day and age, an adviser will not make a recommendation purely becuase he will get commission if it's not the right recommendation, and if he did would be struck off by the FSA right away.

 

Also, having more than one pension is not a bad thing, you might want to go part-time one day and take one of your pensions to make up for the loss of wages, then take the rest of your pensions when you properly retire.

 

Hope this helps.

 

By the way, I'm a plumber, honest!

 

Thanks for that.

 

The NHS scheme is also a final salary scheme and my earnings are now way in excess of what I was earning when working for the bank. Not sure how much the Bank scheme contributions will be worth so i've emailed them to ask for a fund valuation. The NHS also gives employees only 12 months from when they start working to transfer pensions in from elsewhere so i'll have to get this sorted one way or another soon.

[bigwull22]

It is a final salary scheme at the moment, go to http://www.sppa.gov.uk/

for all the relevant info, unfortunately due to the mis-selling of pensions act I cannot advise on whether you should join the scheme or not

[Auld Reekin']

We're basically saying the same thing but I was talking about in this specific example.

 

What I meant was an IFA can get paid by commission from the insurer/provider or by fee by the client as you say.

 

In this example though, if the recommendation is not to transfer, there's no commission from an insurer so the adviser would charge a fee or he's given advice for free.

 

Fair enough. I wasn't actually recommending that cosanostra see an IFA as it didn't sound to me as if a private pension scheme was the right way to go for them anyway. In fact, I'd always advise extreme caution in these matters as my IFA - good guy though he is - has succeeded in losing me quite a lot of money over the years. Even if I'd just stuck all my dosh under the mattress, rather than taking his advice, I'd be a lot better off now...

 

(Nothing offence meant if you, yourself, are in fact an IFA! )