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Transferring local government defined benefit pension

Discussion in 'Retirement' started by moonpenny, Jan 18, 2019.

  1. moonpenny

    moonpenny Occasional commenter


    I wondered if anyone has any advice to give me about transferring a local government pension.

    I have a teacher's pension which I started in 1989 and stopped paying into in 2014 when I was earning a full time salary of about £39k - I am not planning on going back into a teaching post so want to just leave that there until I reach 60.

    I also have a benefit contribution pension at Royal London which was started in 2014 when I worked one afternoon for an educational organisation - although I no longer work there, I opted to keep the pension going by paying in a certain amount each month as I am now self employed.

    In between 2014 and 2016, I worked at a university and paid in to a local government pension - this is the one I would like to transfer to my Royal London pension.

    My local government pension is very small and I have been given a transfer value of 6.5 thousand pounds.

    My husband thinks that I won’t be allowed to move the local government pension to my Royal London pension because it is a defined benefit pension. Online advice seems to say it is possible with a local government pension as they have funds available to do this, unlike the teachers pension,

    I have thought about getting advice from a financial advisor but from googling this, it seems hard to get anyone to consider taking on small bits of work and also if the cost is high, it makes it seem like not worth doing if any potential financial gain goes straight back out in fees,

    I also got a letter last year from the local government scheme saying I had to either a) take the actual money I put into the pension which was not that much, or b) move the pension transfer pot of 6.5k to another scheme, or I could leave the pension with them for a limited amount of time but then I would need to decide whether to take route A or B at a specified date ( haven’t got this to hand) - I couldn’t just keep the money in with their scheme indefinitely. I told them I would leave the money in the local government scheme at that point and it is still there.

    I am not sure yet when I’ll retire - I’ll obviously take my teacher’s pension and lump sum at 60 but could well carry on being self employed for a good few years yet - I’m in no rush to retire from that.

    Any advice very welcome.
  2. diddydave

    diddydave Lead commenter

    I'm no expert but I would advise caution and make sure you do transfer it rather than take the money out. If you take the money out of the local government you might fall foul of the pension recycling restrictions which would severely limit how much you would be allowed to put into other pensions. Transferring funds should not be a problem in this respect - but finding the best deal clearly will be.

    My first step would be to contact Royal London and ask directly if and how you can transfer other pensions in - and find out what the benefits of doing so are.

    Secondly, I'd look at a private pension - stakeholder pensions etc - and see what benefits they offer and compare the two.

    There are some different rules about taking 'small' pensions: https://www.pensionsadvisoryservice...-me/taking-a-small-pension-as-a-cash-lump-sum
    emerald52 and moonpenny like this.
  3. moonpenny

    moonpenny Occasional commenter

    Thanks Dave
  4. Zoot

    Zoot New commenter

    Not exactly the same but I was able to transfer my Local Government pension - (nearly 11 years) into my Teachers' Pension fund sometime back. I decided that I would prefer to have everything as one pension but I did pay for professional advice before I did this. It may be worth contacting Wesleyan and having a free consultation with them. They will give impartial advice about your pensions - there is no obligation to buy into their financial products and it may make things clearer for you to choose what to do next.
    moonpenny likes this.
  5. moonpenny

    moonpenny Occasional commenter

    Great thanks Zoot

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