Defined Benefit Pension Transfer Case Studies

Objectives: Having worked as a teacher for 30 years, JG was looking to reduce his working hours, with the option to continue part-time beyond state pension age. His partner also planned to semi-retire and start a small business. Their primary goals were twofold; firstly, they wanted the flexibility to draw a variable income to support both their immediate and long-term plans. Secondly, they were planning a house move and required a lump sum to buy a new property outright, using it to clear their existing mortgage. They also wanted the flexibility to access a further lump sum in future to fund home upgrades, including solar panels, efficient heating, and insulation, helping to minimise household expenses in retirement.

In addition to JG’s Local Government Pension Scheme (LGPS), the couple had approximately £24,000 per year in other defined benefit pensions. Given the strength of their guaranteed income, they felt confident their core income needs would be well covered, allowing them to consider transferring other pension assets to support their more flexible retirement goals.

Grove Advice: Grove provided a Full Advice recommendation to transfer to a flexible arrangement with Scottish Widows, with an initial tax-free lump sum of £ 26,658 and the option to ‘switch on’ a regular income or take further lump sums when required. Grove’s advice fee of £3,950 was taken from the pension after the payment of the lump sum.

Overall transfer timescales: 8 months (new enquiry to payment of PCLS)

Client comment: “I am very pleased by the quality of service provided by Grove Pension Solutions. They have been quick and efficient at each stage of the pension transfer process, with the advice given being clear and well explained. Thank you very much indeed!”

Objectives: Following a recent change in employment status, KD faced a period of up to six months without income while establishing himself in a new role. As a result, he needed to access part of his pension to meet ongoing financial commitments during this transition.

Looking ahead, KD plans to downsize his property in due course, to release significant equity. This is expected to comfortably support his long-term retirement income needs, alleviating any concerns about financial security in later life.

In addition, with children in their 20s, KD was keen to ensure that any remaining pension funds could be passed on efficiently in the event of his death, providing a valuable inheritance for them.

Grove Advice: Grove initially provided Abridged Advice with the outcome of this being ‘inconclusive’ (as opposed to ‘Negative’). It was particularly noted that the client had significant asset value but was very limited in accessible ‘cash’ and had already accumulated small personal debts covering his regular outgoings. KD made the decision to proceed to Full Advice, and a ‘Positive’ recommendation was made to transfer to a flexible arrangement with AJ Bell. This enabled KD to receive a tax-free lump sum of £23,378 – 25% of the value, with Grove’s advice fee of £3,950 taken from the remainder of the pension.

Overall transfer timescales: 5 months (new enquiry to payment of PCLS)

Client comment: “Getting a DB transfer done nowadays is hard work! I originally went with another firm, who eventually decided that they couldn’t help, but did pass me on to Grove. Having gone to Grove Pension Solutions, everything went far more smoothly than I expected. Gina and Kevin were responsive throughout and I got the transfer done on time and without hitch. I couldn’t recommend them highly enough.”

Objectives: BM had decided to retire early at age 57 after a change of management in her previous job, whilst her husband had retired more recently. After a lifetime of careful saving, they were debt free and had managed to accumulate over £1m in savings and other investments, over half of which was in other Personal Pensions. BM was therefore not dependant on the guaranteed lifetime income that the scheme would have otherwise provided, but was approaching the schemes retirement age and therefore had to decide whether to take this or transfer.

Grove Advice: Grove initially provided Abridged Advice with the outcome of this being ‘inconclusive’ (as opposed to ‘Negative’). The Grove adviser particularly noted their assets and the large capacity for risk that this gave them, as well as the fact that they had already been comfortably retired for some time. The client opted for Full Advice and Grove recommended a transfer, setting up a low-management charges policy with Scottish Widows, which would later allow flexible access.

Overall transfer timescales: 6 months (new enquiry to transfer)

Client comment: “The whole journey from start to finish was done in a highly professional manner. Grove have a duty of course to ensure you fully understand the implications of such a transfer, so this was always re-iterated along the process. There is no guarantee Grove will recommend a transfer as it’s down to your individual situation. But having worked in finance for many years I was already aware of all the pros and cons but was still determined to make the transfer as it suited our aims. It was also extremely difficult to find a company that concentrated on such transactions, so it was a relief to find Grove. The process takes a few months as you would expect, but I was kept informed at all times what to expect next…. The transfer went through successfully in April having made the initial contact in the Nov prior. Delighted with this end result..”

Objectives: DG wanted to gift a lump sum to family; firstly, his daughter was getting married, whilst his grandchild was in a 1st year at university. He also needed to purchase some equipment to assist with his health issues. In the longer term, he wanted flexibility to supplement his income as he was likely to retire before state pension age, so the option to take more in the early years and reduce this later was attractive. Finally, he wanted to be able to pass on the balance of the fund to his wife and even adult children, in the event of his death.

Grove Advice: Grove initially provided Abridged Advice and the outcome of this was ‘negative’ (as opposed to ‘inconclusive’). He was told that a transfer was likely to be unsuitable, with the adviser particularly noting that this was his only pension amongst other factors. Nevertheless, DG decided to proceed to Full Advice, understanding that the outcome of this was likely to be ‘Negative’ again. This proved correct, with the same adviser formally recommending against transferring the pension. Whilst accepting that the client had limited alternatives and recognising the considerable importance he attached to his objectives, the adviser felt that these factors didn’t outweigh the need to prioritise DG’s income needs in the long term. Nevertheless, the client requested to proceed with the transfer as an ‘insistent’ client, receiving full 25% tax-free cash of £45,150 with the Grove fee deducted from the balance.

Overall transfer timescales: 8 months (new enquiry to payment of PCLS)

Client comment: “Very professional and helpful throughout my progress. Always available to answer any questions or queries..”