Why Now is a Great Time to Consider Your Pension Transfer

If you’re sitting on a Final Salary Pension Transfer Value from your employer, wondering if now is the right time to make such a move, then you must read on. Now could actually be your best time!

It could be your best time for two reasons:

  1. Pension Transfer Values are at a high point.

In response to the Coronavirus outbreak, the World banks are reducing interest rates, which in turn has the effect of reducing the return (yield) people receive for investing in Government bonds (Gilts).

It is these Gilt yields which determine the Transfer Values offered to members of Final Salary Pension Schemes. Now is one of the high points of the last few years.

This is good news if you choose to transfer your pension in the coming weeks as you have more money to invest in your own personal pension.

  1. With stock markets at a low point it is a great time to invest for the future.

The FTSE 100 Index stood at 7651 on 20th January 2020. Two months later on 20th March, it had dropped to 5190 with the effects of the Coronavirus hitting the value of stocks and shares. Over the next few months, while the UK grapples with the outbreak, stock markets will continue to be highly volatile until the end is in sight.

The FTSE 100 index will bounce back, though not until statistics prove new cases have peaked. This could turn out to be sooner than you may think.

The peak of the ‘curve’ for the virus that politicians talk about is predicted to be in next 2 and 3 months. That is the beginning of your window of opportunity. Once the markets sense this peak is imminent, confidence is likely to return and share prices will begin to rise once again.

And if you haven’t transferred by then and started to invest in your own personal pension, you may have lost a golden opportunity to maximise your personal pension pot.

Of course, stock markets are always going to have their ups and downs and to smooth this out at Oaklands Wealth Management we always invest client monies on a ‘phased basis’. This means we invest into funds from your transfer in instalments over a 6 to 12 month time horizon to spread the risk.

Should you really transfer your pension?

Most situations in life have pros and cons. It’s your job, with the right advice, to make a sensible assessment of what’s right for you and your family.

Here’s what the independent trust site Unbiased say about the disadvantages and advantages:

Disadvantages of transferring a final salary pension

  • You’re trading a guaranteed income for pension pot that may run out
  • Your pension pot will be vulnerable to stock market falls
  • You will probably have to pay for advice on the transfer
  • You will be responsible for managing your pension from now on

Advantages of transferring a final salary pension

  • You can access your pension from an earlier age
  • You can vary your income as you wish
  • Unspent pension can be inherited by your beneficiaries, free of inheritance tax
  • If the stock market performs well, you may end up with more money
  • Your pension is not at risk if your former employer becomes insolvent

The best option for you will depend on how you personally weigh up these pros and cons.

The one sure way to know is to consult a trustworthy financial advisor who can analyse your specific circumstances and help you make the right decision. A reputable advisor will not allow you to go ahead if your objectives are not appropriate for a pension transfer.

If, however, they think it may be worthy of consideration they will have a number of meetings with you and give you time to make your own mind up, with all the analysis and forecasts you need.

This is the approach we take at Oaklands Wealth Management.

Please promise me one thing, whomever you choose to help you – look into this now, don’t delay.

Those two factors – high transfer values and low stock markets will not last.

The worst decision is indecision.

Call us now on 0121 355 4455 or click below to book your free appointment now.

[We promise you unlimited free meetings until you’ve made your mind up.]

Why statistics show now is the time to act…

If you can secure a higher value on your pension transfer AND invest it now, history suggests you will have invested at a low point.

This places you, and those who depend on you, at a distinct advantage.

Think of your pension as buying a number of units at their value on the day you invest. The value of your pension will fluctuate according to the rise and fall of the value of those units. Generally, if the stock market rises then your pension will rise in value as you have the same number of units that are worth more.

If you are still doubtful, look at the chart below on the bounce back factor from previous outbreaks. The chart below shows the effect of previous outbreaks on financial markets, in terms of the percentage change in market values from the start to the crisis peak, then one month after and three months after.

The bounce back effect after previous outbreaks. Source: Financial Times


Call us now on 0121 355 4455 or click below to book your free appointment now.

P.S As an added bonus we’ll also show you how our cashflow modelling tool helps you safely take an income for life in retirement, without the worry of running out of money.