10 things to think about before transferring out
Active Member Considerations
Before you can proceed with pension transfer financial advice you will need to make a decision about opting out the NatWest Group Pension Fund and becoming a deferred member.
You are able to opt out the fund via the flexible benefit system, which is called RBSelect. Once you’ve completed the ‘opt out’ process via RBSelect, there is then a one complete calendar month notice period.
In addition the LV= Financial Advice team can advise you through the process but there would be a charge for this service. You can call 0800 022 3866 to discuss with an adviser.
10 things to consider before transferring out
1. Your Fund income is guaranteed for life. Your Fund pension income is guaranteed to last for the rest of your life, and you know what you’re going to get every month. An average 55-year-old man today will live to 85. A woman will live to 88.
2. The Fund gives you a cash option. With the Fund, you can take some of your future benefits as tax-free cash. That way, you and your spouse get some cash AND a guaranteed income for life.
3. The Fund helps against inflation. Your income from the Fund can go up each year, to give you valuable protection against inflation.
4. The Fund protects your family. With the Fund, your spouse or partner will get an income if they outlive you – so can your dependent children. You don’t need to worry about leaving them with nothing.
5. The Fund takes away worries. Your monthly income from the Fund can’t go down. If you transfer out, you might have to manage investments and pay advisers. This can be hard to do – especially if your health gets worse.
6. Your Fund income is likely to be worth more. A transfer value can seem like a lot of money. But remember: it might need to last you the rest of your life. And it’s unlikely to be as much as the total value that the Fund would give you and your family – especially if you and your spouse or partner live longer than you expect.
7. The Fund is better for most people. The Financial Conduct Authority says that most people with defined benefit pensions like the Fund “will be best advised to keep them” rather than transfer out. Your financial adviser will start from that position.
8. You can’t change your mind. If you transfer out, you can’t go back to the Fund. So it’s really important that you take time to properly weigh up the pros and cons. Talk to your spouse or partner about what happens to their income if they outlive you.
9. Good advice is worth paying for. With a big decision like transferring out, it’s well worth paying to see an independent financial adviser. To protect you, the government requires you to get advice if your transfer value is over £30,000. The NatWest Fund Trustee has secured preferential advice services for you with LV= Financial Advice Services Limited. You will need to opt out of the Fund first. Find out more on Your pension record > Get a Quote > Get Advice to find out more. You can also visit www.lv.com/natwest or phone 0800 022 3866. Alternatively, you can also find a financial adviser regulated to provide pension transfer advice at moneyadviceservice.org.uk/directory.
10. Watch out for scammers. 8 people a second are contacted by scammers, trying to cheat them out of their pension. See thepensionsregulator.gov.uk/scams.
Explore the Video Hub
Take a moment to watch the short videos, including Should I stay or should I go? to understand more about your options and what they mean for you.