Why Former Banker Duncan Transferred His Final Salary Pension
Duncan’s Story…
Manchester-born Duncan now resides in Bolton, where he’s lived for most of his life.
He has three daughters: Rebecca, 26, Kate, 22, and Sarah, 18. As I speak to him he’s out on dad duty, picking up Sarah. She’s in full-time education at the time of writing but is expecting to leave in the summer of 2018 and start work.
Rebecca has struck out on her own and moved down to London to pursue her career, while Kate also works full-time and lives at home with Duncan and her younger sister.
The Barclays Boy from Bolton
Duncan enjoyed a 23-year-long career at Barclays – during which time he was a member of the bank’s final salary pension scheme – before leaving to set up his own business.
Following two fairly high-pressure roles back-to-back, Duncan, now in his mid-50s, opted for a slightly slower-paced approach to working life.
He’s currently working for his friend as a Commercial Director, enjoying being based locally and the more relaxed working atmosphere.
As most people do as they approach this age, he’s been increasingly thinking about his pension future. While his Barclays final salary scheme would provide him with a guaranteed income from the age of 60, he wasn’t planning to retire so early.
What’s more, there was nothing in the scheme that would enhance his pension if he delayed taking it beyond his 60th birthday.
“I’m planning to work until at least state pension age,” says Duncan. “Sitting at home isn’t for me. A couple of weeks on holiday is great, but you’d be bored of it after a while!”
Why Duncan Chose a Final Salary Pension Transfer…
With this in mind, Duncan started to explore his options, including looking at a final salary transfer. However, this wasn’t his only reason for transferring.
“One of my biggest motivations for transferring was that I wanted the pension to benefit my daughters should anything happen to me,” Duncan explains.
While most final salary schemes provide a spouse’s pension after the death of a member, Duncan is very sadly a widower so this benefit didn’t apply to him.
“Barclays would only provide a dependant’s pension for my daughters until they reached 23, and only then if they stayed in full-time education until that age. With my youngest about to leave college to start work, the pension would essentially die with me, something I was obviously keen to avoid.”
The 2015 pension freedoms relaxed the rules around inheriting defined contribution pension pots (the type of pension Duncan went on to transfer his final salary scheme to).
One of the key changes was to abolish the much-maligned 55% ‘death tax’ on the funds deceased members of such schemes passed on.
Josh at Drewberry was extremely helpful and friendly in answering my many questions about the policy before I went ahead.
How Duncan Found Drewberry…
Already somewhat clued up about final salary transfers from his years in the banking industry, Duncan began researching his options online and came across Drewberry. He first stumbled across our Final Salary Pension Calculator in the autumn of 2017 in the course of his research into the topic.
“From the outset I liked that I was able to use a tool like the Final Salary Calculator and put in actual numbers,” recalls Duncan.
“I also appreciated how thorough the accompanying guide to final salary transfers was I received after I completed the calculation. From there I went to look across the site, reading testimonials and going through details on how a transfer would work step-by-step.”
Following Duncan’s visit to the site, we matched him with one of our in-house final salary transfer experts, Peter Banks, who was Duncan’s main point of contact throughout the transfer process.
Getting to know each other…
“Peter called me about 6pm on the day I used the calculator,” says Duncan. “From the start I felt confident in his knowledge and expertise. After our initial conversation, we went on to discuss how the process would work.”
Drewberry’s role..
The first part of the process is as simple as getting to know Duncan, having a formal chat to listen and understand his needs, his current circumstances and his retirement objectives.
Understanding Duncan and what is important to him we can put together a Recommendation Report in which we present our recommendations on how he can meet his goals, we can talk through how his financial future might look and detail whether a transfer is right for him based on a number of factors.
As part of the process, Peter did some cashflow modelling. “I found this very useful as it plotted how long the pension pot might last against my life expectancy based on various factors such as the growth rate of the fund,” explains Duncan.
“Overall, I found the whole process very smooth and easy to grasp. I was fortunate to have a bit of a leg-up in terms of understanding because I’d worked in banking, but I still felt like I was kept very well-informed by Peter throughout.”
A Safe Pair of Hands…
After the transfer went through at the close of February 2018, Duncan opted to use Drewberry’s ongoing service. This provides him with a yearly review of his pension pot, with Peter maintaining oversight of his holdings going forward. Drewberry now provides a bespoke service for Duncan to meet his unique needs.
“Put it this way: if I had toothache, I’d go to the dentist,” says Duncan. “That’s why I chose to use Drewberry’s ongoing service.
“I wanted my pension pot to be in the hands of experts and I didn’t mind paying for that level of expertise. I was impressed with the way Peter dealt with my transfer so I was happy to let him manage my pension pot on an ongoing basis.”
“In my personal and business life I’ve dealt with a lot of professionals over the years and I can honestly say that, from start to finish, Peter was one of the best I’ve come across.”
Written by:
Michael Englefield
