Meet the Client: Colin’s story

Pension transfer

Colin approached AAB to seek advice about whether or not he should transfer his pension scheme from his previous employer of 35 years.

As part of the government’s pension freedom reforms in 2015, it’s now possible to transfer out from schemes that have become deferred or been closed to allow for more flexibility around the drawdown of benefits.

However, transferring out is an irreversible decision that needs careful thought and the government has made it a requirement to seek advice before doing so.

Colin talks to AAB about the process.

What was different about AAB’s approach?

I saw a number of companies before choosing AAB, and their approach was a lot less pushy.

Instead of phoning me to chase me up, they gave me plenty of time to go away and think about it before making a decision about whether to work with them.

They also explained everything thoroughly and helped me consider the pros and cons.

The other thing I liked about AAB was that they’re a relatively young team. You want to know whose hands your money will be in, in the future.

What made you want to explore transferring your DB pension?

On the one hand a Final Salary pension is great because it’s a guaranteed income, but there would be no legacy for my wife or children – when I die 50% of what was left would go back to my employer.

The other issue was that when you retire with a final salary pension, you get a fixed amount each month. That sounds great initially, but when you think about it further, you think, ‘Well I don’t think I’ll want that much when I’m 80 and not able to do anything with it.’ While some people like that security I wanted flexibility and so I needed to find out what the options were.

Describe the process

As I work offshore, I’m not at home that often, so Martyn Paterson, who advised me, kindly agreed to visit me when I was at home.

We started by looking at things like my salary and any loans and mortgages I had, and any other savings, so that he could get a full picture of my portfolio. He asked me questions around how I wanted to spend my retirement and he carried out a risk profiling exercise to find out how open I am to risk so that he could create an investment strategy that suited me.

We looked at whether I’d be able to retire early. We looked at the fund and saw that I’d have the ability to take a lump sum when I needed, which means that basically I’m in charge!

He then contacted my employer to confirm the transfer value figure and managed the whole process on my behalf.

How does it feel now to have made the decision?

Now that I’m 55 I can take part of the money at any point. I don’t have any clear plans for this at the moment, but I’m thinking about buying holiday home and perhaps carrying out some renovations on the house.

It’s just great to have this flexibility and to feel that I know a lot more about my money now, and what it can do for me, than before. And now I have the comfort of knowing my wife and children will also benefit from it. I’m very glad I chose AAB!

If you wish to have a no-obligation chat to one of our own trusted advisers, please contact us at advice@aabwealth.uk or 01224625111. We’d love to hear from you.