So instead of waiting until she was 60 (over 10 years away) for a guaranteed annual pension of £15,000, Mrs Dee decided to transfer out of her final salary scheme and move the £600,000 (40 times her £15,000 guaranteed annual pension) to a QROPS.
Why did she transfer from her final salary scheme?
Mrs Dee’s main reasoning was that she wanted the flexibility to be able to leave her pension to whomever she wanted after her death – her children and husband. Under the final salary scheme her husband would have received just half of the £15,000pa. When she reached 55, Mrs Dee also wanted to be able to access her pension, if required, and to be able to take out varying amounts if and when she wanted. This was made possible by cashing in her final salary pensions.
The demand for transferring workplace pensions into private arrangements has shot up since new pension freedoms were introduced two years ago, and the temptation to switch has grown in the last year as final salary pension transfer values have soared to record levels.
The reason pension transfer values have soared is because rock bottom interest rates and gilt yields mean Pension Members are being offered a multiple of their promised income at retirement. This is usually between 20 and 25 times, but since the vote for Brexit, multiples of 30 or above are not untypical.
These record transfer values will not last if interest rates rise
Act now and you too can take advantage. Before you start taking your pension, speak to Blacktower. Opportunities like this don’t come along more than once in a lifetime!
Disclaimer: The above information was correct at the time of preparation and does not constitute investment advice. You should seek advice from a professional regulated adviser before embarking on any financial planning activity.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
Much has happened since I last put pen to paper in the immediate aftermath of the referendum result and I thought it sensible to comment on some of the issues which are emerging from the ‘swirling fog’ that we experiencing. July 24th 2016, reminded me of September 12th 2001 in New York, with people walking around in shock, confused at the attack on the political and economic system. To be angry at the shock of the unexpected result and how that might affect everyone’s life is a natural and rational response, however much it might seem otherwise. Last week I wrote that the result was not a disaster and the financial system was capable of absorbing this shock, in short, my view has not changed.
This month the two main pensions regulatory bodies, the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR), announced that they have joined forces to improve the prospects of retirees and pension savers. Previously, the two have worked together in an attempt to protect savers from pension scams.