As a business we do not undertake any defined benefit transfer business….its too risky for many clients and for our business. That is not say there may be an occasion when a DB transfer is suitable but the bar is, rightfully, high. We are building a triage service to explain the processes and pros and cons but this is not there yet. If you need help we can refer you to DB specialists.
Annuities have fallen out of favour; annuity rates are low, pension freedom is attractive, investment returns have been healthy. But it will not always be that way ( as history tells us e.g. 2008) and so you should review any drawdown policies at least annually and review whether an annuity has become the right decision.
If you are invested in a drawdown account, purely for income, then a low return / low risk portfolio will probably fall in value over time. For instance with a 5% withdrawal rate you will need growth of circa 7% to 7.5% to maintain capital ( fund manger charges and adviser charges have to be included). An annuity paying 5% may just do exactly the same without the risk. The message is ensure you review your retirement funds on a regular basis.
Tax free cash is popular, so popular it was renamed the pension commencement lump sum…..with a view to taxing it at some point. Probably never given its so popular. However there is little point in taking tax free cash to put into a cash savings account or a cash ISA. Indeed there may be no point in investing it a stocks and shares ISA since the tax treatment is very similar – unless there are other reasons. Simply put, a pension is very tax efficient.
There are good reasons for taking tax free cash just make sure you have clear advice on the advantages and disadvantages.
As ever speak to an adviser before acting.