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Transfer Values for UK Pensions - Defined Benefit/Final Salary


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I would encourage anyone with a private UK Defined Benefit Pension Scheme (sometimes referred to as a final salary pension) to obtain a transfer value.

Values have been increasing steadily over the years and it is believed that they have now perhaps peaked.

We are seeing values on average standing around 25x the current annual pension benefits.

This means that if you have a UK pension and the current benefit gives you a yearly pension of £10,000 the transfer value could be £250,000.

So if you are a deferred member of a Defined Benefit (final salary) UK Pension Scheme and live in Australia we strongly believe that you should be proactive in this area and we (Vista Financial Services) can request the relevant transfer values and information for you.

We can then if required provide advice around whether these benefits are best placed where they are OR whether they are going to work better for you in retirement elsewhere we can then if appropriate carry out a transfer for you.

Our solutions include being able to transfer to an Australian Super Fund (QROPS) where applicable which is a solution only open to people above age 55 currently (due to HMRC legislation).

We are also able to provide advice on transferring into an International SIPP (perhaps as an interim measure if under age 55 until it can be transferred to an Australia Super Fund) where the money can be appropriately invested as advised by us into UK and Australian currency dominated investments (I will expand more on this solution in another post).

Please note that government pensions such a NHS and Police Pension cannot be transferred neither can the UK State Pension.

 

 

 

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14 minutes ago, rammygirl said:

Can local government pensions be transferred? Mine isn’t huge but will pay out a £25k lump sum and about £8k per yeat (latest statement) in 2022. Been frozen for many years. It is my only UK pension and I do not have any superannuation in Australia.

 

Hey rammygirl

The local government pension schemes are usually ok as they are funded schemes: https://www.bbc.com/news/business-11446833

It's the government un-funded defined benefit schemes that had the ban put in place.

I'd suggest it would be worth at least obtaining a cash equivalent transfer value.

Andy

 

 

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On 27/08/2020 at 09:44, Andrew from Vista Financial said:

I would encourage anyone with a private UK Defined Benefit Pension Scheme (sometimes referred to as a final salary pension) to obtain a transfer value.

Values have been increasing steadily over the years and it is believed that they have now perhaps peaked.

We are seeing values on average standing around 25x the current annual pension benefits.

This means that if you have a UK pension and the current benefit gives you a yearly pension of £10,000 the transfer value could be £250,000.

 

 

 

Andrew, do you know why the values have been increasing and why they may now have peaked?

Edited by Jessica Berry
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15 minutes ago, Jessica Berry said:

Andrew, do you know why the values have been increasing and why they may now have peaked?

Hi Jessica

 

In a nutshell it's predominantly due to how they are calculated and their correlation to government gilt yields, put simply the lower gilt yields go the higher transfer values go. There's not much room left for gilt yields to go lower.

Take a look here: https://www.xpsgroup.com/news-and-views/transfer-values-continue-to-rise-to-a-new-record-high/

Regards

Andy

Edited by Andrew from Vista Financial
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