Guest Chelseadownunder

Caution UK Pension transfers

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    Guest Chelseadownunder

    I would strongly urge caution for those of you with UK Pensions that are final salary.

    Nurses, for example. There seems to be a fine line that advisers over here are using a bit of poetic licence on (to say the least). To the best of my knowledge no adviser here holds indemnity insurance for advice on the UK part of the transfer. They can only facilitate the transfer and advise on the product you transfer to.

     

    Unless you are transferring to a Final salary scheme here which are probably rarer than in the UK, you are...

    General statement not meant as advice - "Transferring the investment risk from the pension provider to yourself." I am not sure this is being made clear. You will be giving up a guaranteed benefit to one dependent on investment returns.

     

    Now I know loads of arguments can be used for an individual to choose to move a final salary scheme to Australia (RPI/Annuity rates/Companies financial strength/Flexibility....the list goes on) . I am just urging caution.

     

    These Australian Advisers don’t hold (generally if at all) G60 which you would need to hold if you were advising on the transfer in the UK and they don’t hold UK indemnity insurance to protect the client.

     

    In the UK we saw loads of Nurses / Dockers....... Transfer from their final salary schemes to Personal Pensions and were miss advised :mad:. The Personal Pension providers were then forced to pay compensation and admit they were wrong. THESE WERE ADVISED SALES.

     

     

    This Thread is not meant as advice.

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    Guest Nick11

    I was in a final salary scheme and transferred my pension over here. I did it as I felt if I was to die- hubby would only get half of my pension and if we were both to die - the government would get it. Whereas here my kids would get all of it.

    Looking back I was silly to transfer it so early and hand on heart -Im not really sure if I've made the right decision or not.

    But its done now and theres no going back.

    I do wonder though what will happen in the future. The way the uk is going there won't be enough money left in the kitty to go around . People living longer..drawing more and more out of the retirement kitty with fewer and fewer contributing.

    Not a pleasant thought!!!!

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    Very useful thread Steve and I completely agree that final salary pension holders should be aware of transfer companies that are not always acting in the best interests of the clients. I would say that it is certainly prudent to take advice from someone who has financial planning experience in both the UK and Australia.

     

    There can be many advantages to having UK Pension money in the Australian Superannuation system and there can also be many disadvantages and people need to be made aware of these. This also applies to people with UK market linked Pensions. A competent Adviser should discuss all of these issues with the client when deciding whether a transfer is right.

     

    The point about Doctors, Nurses etc in the UK being misadvised in transferring their Final Salary schemes to Personal Pensions is very true. However this was not in relation to overseas Pension transfers but was more to do with active members of Final Salary schemes in the UK being advised to transfer these schemes to market linked schemes within the UK.

     

    There are many other factors that come into play as to whether a transfer out of this particular type of scheme is in the client's best interests and as the Australian Superannuation system is very different to the UK there are extra reasons why transfers could well be in people’s interests one of them being such as Nick11’s reason above.

     

    There are certainly transfer companies out there that are transferring Pensions when in some cases they should not have been transferred and I have posted a thread on this in the past and I have certainly recommended to some of my clients not transfer their Pensions as it has not been right for them to do so.

     

    People should deal with an Adviser that is going to actually advise if it is not the right thing to do and since Financial Planners are under very heavy scrutiny especially at the moment and will be acting diligently with a fiduciary duty to their clients I should hope that Planners will do the right thing.

     

     

     

    Kind Regards

     

    Andy Williams

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    Guest Chelseadownunder

    As I mentioned in my thread above

    “Now I know loads of arguments can be used for an individual to choose to move a final salary scheme to Australia (RPI/Annuity rates/Companies financial strength/Flexibility....the list goes on)”.

    Death benefits…as Nick 11 mentioned.

    An adviser cannot advise if it’s the right thing to do or the wrong thing to do.

    All he can do is present you with the facts, projections / assumptions.

    The most important point you need to be clear on is when you give up your final salary pension and transfer it to an Australian Super fund (Not final salary) you are transferring the investment risk to yourself.

    I have seen examples where it is obvious clients haven’t realised they have made this change on transfer.

    I hope this helps.

    Steve

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