I was offered a transfer value of £80 300 for member contributions of just £1320 during the mid 1990s. The DB pension is projected to give £3115 in ten years' time.
I searched high and low for authorised pension transfer advisors. Most were only interested in a bigger 'pot', or insisted in taking it under their wing, and providing on going advice. Grove Pension Solutions, of Orpington, were the cheapest I could find, who would simply provide the mandatory advice, and sign off on the transfer. Their costs are 3% for the first £250k, then 2% for the next £750k, and 1% for any balance, all subject to a minimum of £2950.
I had to disclose income/expenditure and assets/liabilities, and finally had an 'interview'. Their report concluded that I give up my DB pension. Their calculations hinge on two numbers:
Transfer Value Comparator - what the transfer value would need to be, for a personal pension to match the existing scheme benefits, if I did not take any investment risk before retirement date. £97 800.
Critical Yield - annual investment return needed between now and retirement, for a personal pension to match the existing scheme benefits, ie annual return needed to be able to buy an annuity. 4.7%
Do I feel able to achieve 4.7% ? Well based on my performance over the last few decades, yes I do. And even so, the pleasure in getting that pot into my SIPP and outside of my estate is very welcome. The transfer completed last week.