Recent research discovered a 120% increase in enquiries about transfers out of final salary pension schemes compared to Dec 2015.
That’s a huge increase. The question is – why?
My experience in dealing with a number of theses cases over the past few months is that there are three primary reasons.
FIRSTLY. Transfer values have increased substantially over the past couple of years and it is thought that they are at or around an all time high. In some of the cases I have dealt with the transfer value comfortably exceeded total pay during the period of scheme membership.
SECONDLY. Evidence is growing that peoples’ expenditure patterns in retirement just do not match the inflation linked pension from a final salary scheme. Many of my clients tell me that they will need much more income in the early years of retirement than they will need when they get into their 80’s. Those type of expenditure patterns can be organised much better once the money is in a Personal Pension Plan.
THIRDLY. Many clients start by telling me they are “risk adverse” and that they perceive a transfer out to be high risk. In reality having what is, for most people, a significant investment totally under the control of the pension scheme of an employer, they worked for many years ago, for the rest of their lives could be much higher risk than having it totally under their personal control.
Don’t get me wrong. I am not saying that everyone should transfer out of deferred final salary pension schemes. What I am saying is that it is your money. You need to know how much it is and have thought through whether it is best left where it is or transferred somewhere else.
You are entitled to a transfer value once in any twelve month period without charge. It is important to get all the information you need up front as the transfer value is only guaranteed for three months so just text me on 07770 575122 and I will send you a draft letter of request.
My final message is the same as always.
IT’S YOUR MONEY. Give it the time and attention it deserves and it will look after you very well.
Please feel free to share this message with your friends who have previous employment with large employers. You could well become their hero.
PS. Sorry, but if you have benefits from government/local authority, teaching, or national health service employment none of this applies to you. It is not possible to transfer out of those schemes.
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