Investment returns

This Forum is the main messageboard to discuss all things Claret and Blue and beyond
Post Reply
atlantalad
Posts: 480
Joined: Fri Jan 22, 2016 9:57 pm
Been Liked: 131 times
Has Liked: 114 times

Investment returns

Post by atlantalad » Fri Apr 19, 2019 1:18 am

Considering put my pension pot into drawdown and know there are a few posters on here worldly wise on pensions and investments. Hence question, is a 5 or 6% net per anumn return on managed investments a reasonable expectation?

brunlea99
Posts: 352
Joined: Sun Jan 24, 2016 5:27 pm
Been Liked: 129 times
Has Liked: 314 times
Location: Dorset

Re: Investment returns

Post by brunlea99 » Fri Apr 19, 2019 7:48 am

You should seek pension advice from Independent Financial Advisers. It's free:

https://www.unbiased.co.uk/adviser-enqu ... gKWQvD_BwE" onclick="window.open(this.href);return false;

Bosscat
Posts: 25361
Joined: Mon Oct 01, 2018 9:51 am
Been Liked: 8426 times
Has Liked: 18095 times

Re: Investment returns

Post by Bosscat » Fri Apr 19, 2019 8:05 am

atlantalad wrote:Considering put my pension pot into drawdown and know there are a few posters on here worldly wise on pensions and investments. Hence question, is a 5 or 6% net per anumn return on managed investments a reasonable expectation?
I echo Brunlea99 seek advice from an independent advisor. I did.

Oshkoshclaret
Posts: 596
Joined: Thu Jan 21, 2016 1:18 pm
Been Liked: 317 times
Has Liked: 83 times
Location: Dallas, TX & Jefferson, MD
Contact:

Re: Investment returns

Post by Oshkoshclaret » Fri Apr 19, 2019 9:08 am

From my experience managing charitable endowments, I would say 5% is a reasonable expectation.

brunlea99
Posts: 352
Joined: Sun Jan 24, 2016 5:27 pm
Been Liked: 129 times
Has Liked: 314 times
Location: Dorset

Re: Investment returns

Post by brunlea99 » Fri Apr 19, 2019 9:47 am

The OP, or anyone else considering it, should NOT make a decision on moving their pension pot to a drawdown option, without professional advice. It's a potential life changing course of action.
These 2 users liked this post: Taffy on the wing Spike

pureclaret
Posts: 1143
Joined: Sat Jan 23, 2016 5:38 pm
Been Liked: 433 times
Has Liked: 176 times

Re: Investment returns

Post by pureclaret » Fri Apr 19, 2019 10:42 am

You should seek advise, the government have a free advisory service.
You need to consider things like family members, like partner and any children.
After saying that I have cashed in several pensions over a 4 year period to avoid higher rate tax, and have put the money into stocks and shares ISA's and am averaging 5.4% per annum. Most of it through Hargreaves Lansdown who will give full advice at a cost limited none advise but give guidence on what funds do what and will arrange all the ISA transfers and do so yearly until all funds in ISA so no tax. If i die my wife can carry on receiving the income tax free as its possible to transfer to spouse ISA funds and retain the unbreakable of the isa. upon both deaths money goes to the children. here as in the pension fund it could be lost.
But again I would recommend getting advice.

Paul Waine
Posts: 9845
Joined: Fri Jan 22, 2016 2:28 pm
Been Liked: 2344 times
Has Liked: 3164 times

Re: Investment returns

Post by Paul Waine » Fri Apr 19, 2019 10:46 am

atlantalad wrote:Considering put my pension pot into drawdown and know there are a few posters on here worldly wise on pensions and investments. Hence question, is a 5 or 6% net per anumn return on managed investments a reasonable expectation?
Hi atlanta, I'm at about that stage also - though back at work at present. I'm assuming you are UK based - and not in Atlanta. The UK (along with a large part of the world) has experienced 10 years of "managing the consequences" of the 2008 world financial crisis. Interest rates have been historially low. UK is also at the point of a change with respect to membership of EU. Whatever we think about brexit, we should remember that "past results are no indication of future returns....." Remember also that we don't know how climate change will effect future returns. Depending on your age, you are looking at somewhere around 30 years in retirement, more if you are retiring early or in excellent health.

My first steps in retirement planning is working out what I need to spend and then adding what I'd like to spend. Category 1 - all the essentials - Category 2 - the travel/holidays I'd like to do while I'm still active, but equally I can "budget down" of the investment returns are down.

I'm sure you are also thinking of 3 x 10 year (planning) periods, (1) the active years, travel and whatever you want to do; (2) the slower pace years, when travel may not be so frequent/adventurous; (3) the (possible) cared for period. Periods 1 and 3 are the higher spending ones, 2 will be lower spending.

The rest of it is very personal. So long as you remember that financial advisors are trying to sell you something and you can manage your retirement plans if annual returns are closer to 4% than the 5-6% you quote you may be in a good place....

atlantalad
Posts: 480
Joined: Fri Jan 22, 2016 9:57 pm
Been Liked: 131 times
Has Liked: 114 times

Re: Investment returns

Post by atlantalad » Fri Apr 19, 2019 10:52 am

I probably should have stated I have sought independent advice from a "cautious" IFA. I know it boils down to risk and drawing the correct proportion to allow capital growth whilst minimising personal taxation. An interesting fact that was covered is that one should expect investments to grow 100% over a 12 year period. That sounds pretty high to me so just posing the question to those financially savvy is a 5 or 6% net return normal/ doable.

Paul Waine
Posts: 9845
Joined: Fri Jan 22, 2016 2:28 pm
Been Liked: 2344 times
Has Liked: 3164 times

Re: Investment returns

Post by Paul Waine » Fri Apr 19, 2019 10:53 am

pureclaret wrote:You should seek advise, the government have a free advisory service.
You need to consider things like family members, like partner and any children.
After saying that I have cashed in several pensions over a 4 year period to avoid higher rate tax, and have put the money into stocks and shares ISA's and am averaging 5.4% per annum. Most of it through Hargreaves Lansdown who will give full advice at a cost limited none advise but give guidence on what funds do what and will arrange all the ISA transfers and do so yearly until all funds in ISA so no tax. If i die my wife can carry on receiving the income tax free as its possible to transfer to spouse ISA funds and retain the unbreakable of the isa. upon both deaths money goes to the children. here as in the pension fund it could be lost.
But again I would recommend getting advice.
Hi pure, just on that last bit. My understanding is that as pension fund is in trust it is not counted as part of the deceased estate and, if you die before 75 can pass to whoever is nominated free from any tax. If deceased is over 75, it will pass subject to te marginal income tax rates of the recipient(s).

I'm guessing you are refering to defined benefit pensions when you just receive a pension from your employer(s) fund.

I'm refering to defined contribution or personal pension where you have your own "pot of money."

Pensions are complicated - too many different types. Good financial advice is required.

Bosscat
Posts: 25361
Joined: Mon Oct 01, 2018 9:51 am
Been Liked: 8426 times
Has Liked: 18095 times

Re: Investment returns

Post by Bosscat » Fri Apr 19, 2019 11:01 am

atlantalad wrote:I probably should have stated I have sought independent advice from a "cautious" IFA. I know it boils down to risk and drawing the correct proportion to allow capital growth whilst minimising personal taxation. An interesting fact that was covered is that one should expect investments to grow 100% over a 12 year period. That sounds pretty high to me so just posing the question to those financially savvy is a 5 or 6% net return normal/ doable.
Personal experience says yes 5-6% is do-able m8 .... but you do need reputable independant financial advice...

Paul Waine
Posts: 9845
Joined: Fri Jan 22, 2016 2:28 pm
Been Liked: 2344 times
Has Liked: 3164 times

Re: Investment returns

Post by Paul Waine » Fri Apr 19, 2019 11:02 am

atlantalad wrote:I probably should have stated I have sought independent advice from a "cautious" IFA. I know it boils down to risk and drawing the correct proportion to allow capital growth whilst minimising personal taxation. An interesting fact that was covered is that one should expect investments to grow 100% over a 12 year period. That sounds pretty high to me so just posing the question to those financially savvy is a 5 or 6% net return normal/ doable.
My experience from 1998 to 2008 - down about 40%. Dot com boom and bust at the start of the period, World financial crisis at the end. 6% was a good long term assumption in the 1990s.

2008 to 2018 - quantitative easing has pushed the markets back up. But QE has got to come to an end.....

My gut feel, I'd plan on 4% - and take out a bonus if/when the returns for a few years have beaten this target. Maybe in 5 or 10 years time we will have more idea of what the future holds...

pureclaret
Posts: 1143
Joined: Sat Jan 23, 2016 5:38 pm
Been Liked: 433 times
Has Liked: 176 times

Re: Investment returns

Post by pureclaret » Fri Apr 19, 2019 6:30 pm

Hi Paul with regard to pensions unless you use draw down only, if you elect to take the pension through an annuity to get the best return usually upon your death and that of your spouse the pension finishes with no moneys paid to grown up children. I am aware that you can elect to have death in pension, but often lowers annuity unless part of the scheme rules.
But for me unless the annuity rates are high then id look to put money into tax efficient funds that pay an income, whilst not usually guaranteed often beat annuity rates and can be accessed or passed on to others as and when you need / want to.
But as I said you would need to get advise, I am no longer registered to give individual advice, but have 25 years of experience in Financial services and 8 years of retirement behind me at 59 years of age.
This user liked this post: Bosscat

No Ney Never
Posts: 2637
Joined: Mon Jan 25, 2016 10:31 pm
Been Liked: 894 times
Has Liked: 328 times

Re: Investment returns

Post by No Ney Never » Fri Apr 19, 2019 10:09 pm

The problem with pension/annuity is that generally you only get one crack at it.
Your pot becomes available at a moment in time and you have to make a decision that's meant to last a life time. We all know that the markets and the economy are forever shifting but yet you have to try and decide at that moment in time, something that's supposed to see you right for the rest of your natch.
It's no wonder that people struggle to decide today, what's going to see you right for the next 30 or so years.
I have a pension into which both me and my employer contribute, though I'm not at the stage of drawing any sort of income from it, I do sympathise with those that have a decision to make.
Question is, do you spend your retirement looking at what you could have won, or just crack on in the knowledge that you did what you thought was best at the time?

Paul Waine
Posts: 9845
Joined: Fri Jan 22, 2016 2:28 pm
Been Liked: 2344 times
Has Liked: 3164 times

Re: Investment returns

Post by Paul Waine » Sat Apr 20, 2019 12:07 am

pureclaret wrote:Hi Paul with regard to pensions unless you use draw down only, if you elect to take the pension through an annuity to get the best return usually upon your death and that of your spouse the pension finishes with no moneys paid to grown up children. I am aware that you can elect to have death in pension, but often lowers annuity unless part of the scheme rules.
But for me unless the annuity rates are high then id look to put money into tax efficient funds that pay an income, whilst not usually guaranteed often beat annuity rates and can be accessed or passed on to others as and when you need / want to.
But as I said you would need to get advise, I am no longer registered to give individual advice, but have 25 years of experience in Financial services and 8 years of retirement behind me at 59 years of age.
Thanks, pure. Wow retired at 51 - and not long after the 2008 financial crisis. I'm 65 and back at work full time - after 2 years out. Good for my health to be working.

Agree, annuity can be self only, self + spouse/partner and can be plus inflation or flat rate. Also, "enhanced" rates can be obtained for damaged health. And, annuity rates are determined by age on retirement. I can't remember when age to access pension was lifted to 55 - perhaps you retired before the age was raised? Annuity rates have also been very low - along with interest rates being historically low.

The thing that annuities have going for them is security of payment - you know that you will get the money whatever happens to the financial markets. And, if you are lucky to have defined benefit scheme - unless the employer's covenant is weak (some are, BHS being one recent example) - that is generally a lot better than having to deal with the markets.

Of course, as the years go by, defined benefit schemes will be very rare. Everyone will eventually have to learn how to manage their own pension risk.

And, then we've got the government's (both parties have do it) constant "tinkering" with the rules....

Paul Waine
Posts: 9845
Joined: Fri Jan 22, 2016 2:28 pm
Been Liked: 2344 times
Has Liked: 3164 times

Re: Investment returns

Post by Paul Waine » Sat Apr 20, 2019 12:17 am

No Ney Never wrote:The problem with pension/annuity is that generally you only get one crack at it.
Your pot becomes available at a moment in time and you have to make a decision that's meant to last a life time. We all know that the markets and the economy are forever shifting but yet you have to try and decide at that moment in time, something that's supposed to see you right for the rest of your natch.
It's no wonder that people struggle to decide today, what's going to see you right for the next 30 or so years.
I have a pension into which both me and my employer contribute, though I'm not at the stage of drawing any sort of income from it, I do sympathise with those that have a decision to make.
Question is, do you spend your retirement looking at what you could have won, or just crack on in the knowledge that you did what you thought was best at the time?
Hi NNN, yes, this is a good summary of the situation. With defined contribution pension pot you know how much money you have in your pot. But, the markets can go down as well as up - though you know that you need to "look through" the short term variations. If you are lucky your pension pot will be needed to provide income for over 30 years. So, we don't know how the markets will perform - and whether out investment selections will be on average good ones. And, then we don't know what the future holds for us, how our health will play out and put simple, how long we will live.

As a risk manager - but not a financial advisor and no more than personal investment experience - I think the best approach is to split things up: get some money that is regular and guaranteed by buying an annuity and keep the rest invested and, probably, put into draw down. Then there's all the personal/family stuff to include in the plans.

Bfcboyo
Posts: 1965
Joined: Mon Apr 17, 2017 8:30 pm
Been Liked: 441 times
Has Liked: 355 times

Re: Investment returns

Post by Bfcboyo » Sat Apr 20, 2019 12:43 am

I thought we had some new owners reading the title.

lesxdp
Posts: 486
Joined: Thu Jan 21, 2016 9:11 am
Been Liked: 112 times
Has Liked: 1662 times
Location: Burnley

Re: Investment returns

Post by lesxdp » Sat Apr 20, 2019 4:48 am

As already stated independant financial advice is needed. We all have diferent financial needs and aspirations. Also different levels of acceptable risk. All that has to be checked by an advisor. I went through the process a number of years ago and used Carol Parker Pensions on Padiham Road near Tim Bobbin. I have been more than happy with the result having taken money out some years and not others as needed. The pension sum has risen and fallen over the years and you have to be prepared for that but you should be able to set/review your own levels of risk on a regular basis. This will determine where your funds are invested. Obviously if you have a high risk attitude you can make good gains, but at the same time can make high and rapid losses. My view at the end of the day was my pension pot was my money so at least with a draw down pension I have some control over it. Take your time and you will make the correct decision for you and your family.

fatboy47
Posts: 4179
Joined: Thu Jan 21, 2016 8:58 am
Been Liked: 2313 times
Has Liked: 2692 times
Location: Isles of Scilly

Re: Investment returns

Post by fatboy47 » Sat Apr 20, 2019 7:21 am

Nobody has a clue what will happen when the Brexit loons get their way....even the mattress is starting to look tempting.

If you have the nouse there's no reason to suspect you know any less than the alleged professionals....the information is out there. Use advisors if you simply cant be arsed managing your own bread..advisers cant second guess the market any more than you can...they simply work within a level of risk that is predetermined by you.
This user liked this post: South West Claret.

pureclaret
Posts: 1143
Joined: Sat Jan 23, 2016 5:38 pm
Been Liked: 433 times
Has Liked: 176 times

Re: Investment returns

Post by pureclaret » Sat Apr 20, 2019 9:48 am

Paul I retired before i could access my pension at 55 but I was made redundant at 51 took a part time job delivering sandwiches to shops for a company in Chorley and did a few odd jobs decorating etc 2 or 3 days a month to pay for my season ticket and odd away trips until 54 then just did odd jobs until 55 had some savings to help pay mortgage etc until I could access pensions from 55. And my main pension was a final salary pension that paid of my mortgage replaced some of the savings id used. The money purchase schemes are the ones I have cashed in over the last 4 years and then reinvested into ISA,s. So whilst I have not a lot of money I have enough to pay all the bills run our car and enjoy life.
I agree with the idea of doing some work and just do odd things for family we have 3 grown up children, aging parents, and others who require decorating, fencing etc. and do Pilates 3 times a week to stop stiffening up. So all in all i have a happy life

Paul Waine
Posts: 9845
Joined: Fri Jan 22, 2016 2:28 pm
Been Liked: 2344 times
Has Liked: 3164 times

Re: Investment returns

Post by Paul Waine » Sat Apr 20, 2019 10:02 am

pureclaret wrote:Paul I retired before i could access my pension at 55 but I was made redundant at 51 took a part time job delivering sandwiches to shops for a company in Chorley and did a few odd jobs decorating etc 2 or 3 days a month to pay for my season ticket and odd away trips until 54 then just did odd jobs until 55 had some savings to help pay mortgage etc until I could access pensions from 55. And my main pension was a final salary pension that paid of my mortgage replaced some of the savings id used. The money purchase schemes are the ones I have cashed in over the last 4 years and then reinvested into ISA,s. So whilst I have not a lot of money I have enough to pay all the bills run our car and enjoy life.
I agree with the idea of doing some work and just do odd things for family we have 3 grown up children, aging parents, and others who require decorating, fencing etc. and do Pilates 3 times a week to stop stiffening up. So all in all i have a happy life
Hi pure, sounds like you've got all the right priorities - and family can always keep us busy.

Have a great day.

tarkys_ears
Posts: 4237
Joined: Tue Dec 18, 2018 11:30 pm
Been Liked: 1016 times
Has Liked: 1484 times

Re: Investment returns

Post by tarkys_ears » Sat Apr 20, 2019 12:47 pm

Send me £50,000 today and I'll send you £100,000 tomorrow!

atlantalad
Posts: 480
Joined: Fri Jan 22, 2016 9:57 pm
Been Liked: 131 times
Has Liked: 114 times

Re: Investment returns

Post by atlantalad » Sun Apr 21, 2019 8:25 am

Thanks Paul W, pureclaret and NNN for the feedback. As NNN points out I am at that cross road of having to make a decision that will affect the rest of my life for the good/ bad and I don't have the crystal ball to see which scenario will play out best. Hence, reason why I posed the question on this forum because I know many posters have already taken a particular fork in that crossroad and have the wisdom of their choice.

I have a defined benefit pension with a guaranteed pension but, I am widowed so no spouse, live easily within my means, have a heart condition and family history of this, and want to pass on some off my wealth to my children when I eventually depart. I reckon if I invest my pot instead off just accepting my regular pension I will be able to live off a tax efficient investment that return 5 to 6% per annum ( while preserving my pot) so I am trying to gauge if such returns would be reasonable over the long term.

Pureclaret you suggest that there are investment opportunities that beat annuity rates so feeling is 5% investment returns long term should be realistic from properly managed investments.

kaptin1
Posts: 1600
Joined: Thu Jan 21, 2016 9:05 am
Been Liked: 460 times
Has Liked: 109 times

Re: Investment returns

Post by kaptin1 » Sun Apr 21, 2019 9:55 am

If you are considering cashing in your defined benefit scheme and putting the pot into drawdown then (if you haven’t already done so) you should find out what the transfer value is. This can vary widely depending on the scheme with some offering very generous terms (for example, transfer values of comfortably more than 30x the anticipated annual pension are not unusual), others less so (for example, some local authority/government schemes won’t allow you to transfer at all because the pension will be paid out of tax receipts rather than from an accrued pension pot).

However, as stated by numerous people above, you should seek independent financial advice before doing anything. I would note, however, that many IFAs are becoming increasingly nervous about advising clients to cash in their DB pots, mainly because they fear being sued if the decision to transfer turns out to be a bad one (this reflects recent instances of bad advise provided by some unscrupulous operators).

Note that if you are already drawing your pension then you may not be able to put the balance into drawdown.

I did recently cash in my own DB scheme, the reasons being (1) I got a very generous transfer value (2) I want to retire before I am 65 and the penalties for doing so under the DB scheme were significant (3) I want to be able to have flexibility around the timing and amounts I draw to suit my lifestyle and (4) if I die early I want to be able to pass on to my pension benefits to my family rather than seeing them disappear on my death.
These 2 users liked this post: Bosscat TVC15

Spike
Posts: 2682
Joined: Fri Jan 22, 2016 1:07 pm
Been Liked: 594 times
Has Liked: 1225 times

Re: Investment returns

Post by Spike » Sun Apr 21, 2019 10:57 am

Seek independent financial advice. I always show clients the return from every option, drawdown, impaired annuities if relevant, guaranteed annuities and a mixture of all of them.

Then you can make your choice based on all options
Don’t just let some laz6 IFA just show you drawdown

Lowbankclaret
Posts: 6571
Joined: Sun Jan 03, 2016 4:42 pm
Been Liked: 1233 times
Has Liked: 56 times

Re: Investment returns

Post by Lowbankclaret » Sun Apr 21, 2019 4:13 pm

atlantalad wrote:Considering put my pension pot into drawdown and know there are a few posters on here worldly wise on pensions and investments. Hence question, is a 5 or 6% net per anumn return on managed investments a reasonable expectation?
I have discussed drawdown with two reputable IFA. Both would not even consider discussing moving my money from its final salary pension to a drawdown. One explained that lots of people have spent large amounts of their drawdown and then sued the IFA so they will not discuss moving it as that might be taken as advice. They both were clear they would be happy to manage the lump sum if I decided to move the money on my own volition.

My current plan is to keep one of my pensions paying a yearly pension which would be £10,000 a year at 62. Or £13,500 at 65.

I can then get my state pension at 67 which is about £7500.

I am then thinking transferring my pot to drawdown at 60 to 62, which will be between £500,000 and £550,000.

I am hoping to do some travelling for a few years, Italy, Spain, France. Sampling the food.

Couple of bucket list things like Cod and Halibut fishing in Norway. Salmon fishing in Canada.

This way I can spend money up front when I am still healthy enough to enjoy it and should not run out of money.

That’s the current plan anyway.

Lowbankclaret
Posts: 6571
Joined: Sun Jan 03, 2016 4:42 pm
Been Liked: 1233 times
Has Liked: 56 times

Re: Investment returns

Post by Lowbankclaret » Sun Apr 21, 2019 4:24 pm

Just to illustrate the wild difference in transfer values.

My pension that will pay £10,000 a year at 62 has a transfer value of around £150,000.

My other pension that would pay £13,000 a year at 60 has a transfer value of £500,000 to £550,000.

Hence my current plan.

Paul Waine
Posts: 9845
Joined: Fri Jan 22, 2016 2:28 pm
Been Liked: 2344 times
Has Liked: 3164 times

Re: Investment returns

Post by Paul Waine » Sun Apr 21, 2019 5:59 pm

Lowbankclaret wrote:Just to illustrate the wild difference in transfer values.

My pension that will pay £10,000 a year at 62 has a transfer value of around £150,000.

My other pension that would pay £13,000 a year at 60 has a transfer value of £500,000 to £550,000.

Hence my current plan.
Hi Lowbank, yes, those values seem widely different. Do you know why that is? Does one include rpi/inflation linking? does it also include spouse pension? Does the other not include these things? Is one private sector and the sponsor has risk that they want to shed? is the other public sector and isn't backed by a fund?

I think annuity rates at present are somewhere around £5,000+ p.a. on £100,000 at age 65.

Lowbankclaret
Posts: 6571
Joined: Sun Jan 03, 2016 4:42 pm
Been Liked: 1233 times
Has Liked: 56 times

Re: Investment returns

Post by Lowbankclaret » Mon Apr 22, 2019 6:08 pm

Paul Waine wrote:Hi Lowbank, yes, those values seem widely different. Do you know why that is? Does one include rpi/inflation linking? does it also include spouse pension? Does the other not include these things? Is one private sector and the sponsor has risk that they want to shed? is the other public sector and isn't backed by a fund?

I think annuity rates at present are somewhere around £5,000+ p.a. on £100,000 at age 65.
Sorry for the long time to reply , been busy.

One is my ex Lucas pension, which was transferred to Equitable Life when Hurel Dubois took over. Now Safran near the Ford garage. I was there for I was there for 15 years. I left 21 years ago and left it there as the value to transfer to my new company was to small to cover the years of service. I rang them a few weeks ago to ask about what it was worth and got a shock. Basically just under £6000 at 55 and rising to £13,500 at 65. It also increases at 8% each year if left till 66 or 67 etc. Yes it has half spouse pension if I die first. I asked about transfer value and that was around £150,000.

My other is my Rolls Royce pension, been there 21 years. Will be 26 years service at age 60 when I want to retire. This pension is Around £13,000 a year at 60 rising to £19,500 at 65. How ever the transfer peaks at 60 at around £500,000 to £550,000 but gets no greater up to 65.

Both are private companies, both get small rising in payment. Both have spouse at 50%.

I was hoping the ex Lucas pension would pay similar transfer value as I would have transferred both the moment they were around the 1 million mark and just retired immediately it hit that figure.

No idea why one is so much smaller than the other.
This user liked this post: Paul Waine

TVC15
Posts: 8211
Joined: Thu Jan 21, 2016 11:09 pm
Been Liked: 3321 times
Has Liked: 601 times

Re: Investment returns

Post by TVC15 » Mon Apr 22, 2019 7:47 pm

I transferred mine out from a DB scheme after 30 years with a Bank - the Bank were trying to shed pension liability due to big capital issues so the transfer values were very high.
My reasons were very similar to the ones Kaptin articulated really well above.
I know some IFAs are getting nervous and referencing this as a potential future PPI type issue but I am pretty sure that you have to take financial advice to transfer your pension - you definitely did with mine.
My IFA was 25 years experience and was extremely thorough and very good - everything was documented in such a way that it was clear that I had been explained all the risks, what I was giving up in the DB scheme and how a drawdown personal pension operates.
My IFA was getting around 2 or 3 transfers a year for many years - in the last 2 years he has had around 70 all from my ex employer. Any IFAs out there will know how much that means in advisor commission !

One thing I did do within a few months of transferring was to move away from my IFA as he was charging 0.5% a year in charges. I moved to my accountants IFA at a much cheaper annual charge of nearer to 0.1% but a few months ago I realised that I don’t need the IFA until nearer the time I reach 55....in 3 years time so they have agreed to not charge me anything.
My personal pension is with Prudential now and I can track it online every day - it’s increased in value more than 10% since I transferred it less than 2 years ago. I remember my original IFA telling me at the time of the transfer discussions how Prudential were one of the largest funds in the world and how they had 50 analysts reviewing the funds at any one time...and my immediate thoughts were if they are doing that why do I need an IFA ?!!!

It’s a big decision so I do think getting an IFA opinion is essential and get a second opinion aswell - I did. If you do transfer it watch out for those annual IFA charges - try and negotiate them down or shop around.

Bfcboyo
Posts: 1965
Joined: Mon Apr 17, 2017 8:30 pm
Been Liked: 441 times
Has Liked: 355 times

Re: Investment returns

Post by Bfcboyo » Mon Apr 22, 2019 10:08 pm

Sean Dyche

Paul Waine
Posts: 9845
Joined: Fri Jan 22, 2016 2:28 pm
Been Liked: 2344 times
Has Liked: 3164 times

Re: Investment returns

Post by Paul Waine » Tue Apr 23, 2019 12:06 am

Lowbankclaret wrote: One is my ex Lucas pension, which was transferred to Equitable Life when Hurel Dubois took over. Now Safran near the Ford garage. I was there for I was there for 15 years. I left 21 years ago and left it there as the value to transfer to my new company was to small to cover the years of service. I rang them a few weeks ago to ask about what it was worth and got a shock. Basically just under £6000 at 55 and rising to £13,500 at 65. It also increases at 8% each year if left till 66 or 67 etc. Yes it has half spouse pension if I die first. I asked about transfer value and that was around £150,000.

My other is my Rolls Royce pension, been there 21 years. Will be 26 years service at age 60 when I want to retire. This pension is Around £13,000 a year at 60 rising to £19,500 at 65. How ever the transfer peaks at 60 at around £500,000 to £550,000 but gets no greater up to 65.

Both are private companies, both get small rising in payment. Both have spouse at 50%.

I was hoping the ex Lucas pension would pay similar transfer value as I would have transferred both the moment they were around the 1 million mark and just retired immediately it hit that figure.

No idea why one is so much smaller than the other.
Thanks, Lowbank, Lucas and RR, both great firms to work for. I'm guessing, no more, is Equitable Life the reason why the Lucas terms aren't as good as the RR payout?

Lowbankclaret
Posts: 6571
Joined: Sun Jan 03, 2016 4:42 pm
Been Liked: 1233 times
Has Liked: 56 times

Re: Investment returns

Post by Lowbankclaret » Wed Apr 24, 2019 7:08 pm

Paul Waine wrote:Thanks, Lowbank, Lucas and RR, both great firms to work for. I'm guessing, no more, is Equitable Life the reason why the Lucas terms aren't as good as the RR payout?
I will be honest, I have no idea,

I was under the impression The transfer value is normally an estimated liability based on average living age and amount your going to be paid based on the pension rules.

So they do seem strange to be so far apart.

South West Claret.
Posts: 5642
Joined: Thu Jan 21, 2016 11:55 pm
Been Liked: 766 times
Has Liked: 499 times
Location: Devon

Re: Investment returns

Post by South West Claret. » Thu Jun 20, 2019 8:22 pm

Just a general Market heads up if anyone is about to make any investment decisions

https://uk.investing.com/analysis/ipo-f ... -200430594" onclick="window.open(this.href);return false;

It’s not from this Country but nevertheless worth reading for anyone interested in these things.

TVC15
Posts: 8211
Joined: Thu Jan 21, 2016 11:09 pm
Been Liked: 3321 times
Has Liked: 601 times

Re: Investment returns

Post by TVC15 » Thu Jun 20, 2019 8:37 pm

South West Claret. wrote:Just a general Market heads up if anyone is about to make any investment decisions

https://uk.investing.com/analysis/ipo-f ... -200430594" onclick="window.open(this.href);return false;

It’s not from this Country but nevertheless worth reading for anyone interested in these things.

Interesting - cheers.
The Dow is back nearing a 5 year high after a roller coaster 12 months. The market has moved up and down recently purely based on how well or badly trade talks between China and the US are going. A frightening thought when you see who the 2 leaders are !
Our stock market and pretty much every other one round the world moves directly in line with the US markets.

Who knows what’s round the corner though - the political instability is pretty scary.

Post Reply