Advice

Newbie001 · Post by **Newbie001** » 26 Mar 2019, 15:45

Hi
Been with Royal mail since 2014. Old pension scheme I've got wants to give us extra 7k to transfer out giving us a pot of 100k or so. Is it worth transferring it into RM's new pension scheme. Not got a clue about pensions if I'm honest. Would presume a company like RM would be a safe investment, but who knows nowadays.

Post by **RobertT** » 26 Mar 2019, 16:30

Newbie001 wrote:Hi
Been with Royal mail since 2014. Old pension scheme I've got wants to give us extra 7k to transfer out giving us a pot of 100k or so.

Is this a defined benefit pension, where you get an income based on pay and length of service. Or a defined contribution scheme where you've just got a pot of money?

If it's DB then it''s usually better to keep it where it is, because it will pay out an income for the rest of your life, possibly with index linking and spouses pension too? The £7k is probably just a sweetener to get you off their books!

DC schemes don't usually give you an extra chunk of £££'s to transfer, unless it has a guaranteed annuity rate.

Is it worth transferring it into RM's new pension scheme. Not got a clue about pensions if I'm honest. Would presume a company like RM would be a safe investment, but who knows nowadays.

As far as I know you won't be able to transfer in any other pension into the CDC scheme once it starts. You can't transfer into the DBCBS either. But you may be able to transfer into the RMDCP or another DC scheme separate from RM.

If in doubt please seek proper advice from an IFA.

Newbie001 · Post by **Newbie001** » 26 Mar 2019, 18:37

It's a DB scheme. Not massive, think about 3.5 k per year. But think you're right. Just trying to get me off their books ;-) Think I'll keep it where it is for now. Might think differently when 55, depending on health, but that's a little way off. Thanks for you're advice.

heapsy · Post by **heapsy** » 28 Mar 2019, 18:59

Newbie001 wrote:It's a DB scheme. Not massive, think about 3.5 k per year. But think you're right. Just trying to get me off their books ;-) Think I'll keep it where it is for now. Might think differently when 55, depending on health, but that's a little way off. Thanks for you're advice.

If it is a DB scheme then why not just leave it where it is? It would be a welcome supplement to your RM pension. If it isn't a DB scheme, then maybe move it to a SIPP. I'm in the process of moving 2 DC schemes and transferring to a SIPP, so I don't have too many schemes. I also intend to retire from RM at 60, and will take these at 60 alongside my NRA 60 benefits. Life's too short and I'm getting knackered.