Movember SIPPS

It's not just about the moustache. Movember is also a good time to move your final salary pension scheme to a sipp.

I am not a professional and therefore this is not advice. What I do know is that the gap between rich and poor continues to widen. In December interest rates will may go up. Politically this corupt bunch may not want to stall their Brexit bounce, often called a dead cat bounce. If they start moving up transferring from a final salary pension scheme to a sipp will be less beneficial.

There are two main reasons why a SIPP has been so popular in the last few years.

With annuity rates being so high the transfer value of a pension becomes relatively huge.

Basically 20-25 times the pension value.

Ok, what am I talking about ?

If you are 40+ you may have had a pension with an employer in the past called a final salary scheme, if so, that's what I'm talking about.

In my case it wasn't a bank but from 78-89 I worked in WM the place that printed the first Deadbeat. After university I got a full time job so I was in the pension from 86-90.

I left it alone and after many takeovers it became the RBS pension fund. They were due to pay me £1400 a year when I left in 1990 and by 2017 it was nearly £5000. It went up every year, roughly inflation to save getting too anal.

I asked for a transfer value. This is the value they believe it's worth to them to get me off the books. I'm joking, but the real calculation is not too far away. The real calculation is the cost of buying an annuity to cover it.

The first years I asked it wasn't too much so I left it alone. The main reason was interest rates were higher. The game got more interesting when interest rates plummeted. When I was 51 they offered a transfer value of £104,000 but as the pension started at 60 I thought even my life expectancy was better than that.

There are two main reasons cited for moving to a SIPP,  portability and life expectancy. 

As readers know, my Deadbeat days are being remembered by reading the copy. I was very drunk. By the time I reached 40 I was a very high functioning alcoholic whereas now I merely have early onset through drinking too much. In short my life expectancy is shorter than most in the pension fund.

When you die your pension tends to die with you or can go on to your spouse at half the rate. These final salary schemes used to be well funded but when Gordon Brown and the Tory Blair stopped the tax credits on dividends they were raiding the pension funds in a way Maxwell or the Banks used to. It was the safety net the poor had and although many of the rich benefitted having a final salary scheme ensured public sector workers as well as clerks in an office had a paid up retirement plan.

I've never voted Tory until 1997 when I did so by mistake. I'm still disgusted by what they did. They clearly thought they were taxing the rich, but they were killing off the final salary scheme. Battering 100,000 rich bastards with the hard work of 10,000,000 poorer ones is the Tory way. Just look at how we will pay for the furlough.

I digress. The second reason cited by advocates of the SIPP is flexibility. This is because when you die, your pot of cash goes to your beneficiary.

Back to my example. I knocked back £104,000 and took £130,000. My basic believe was that I wanted an amount that would last me until I was 80. If I see 80 there'll be a stewards enquiry. If I die late 60's Jackie gets the cash.

My own circumstances of partner being 10 years older also has a massive impact. If she was 10 years younger then I'd probably not have transferred it as even a half pension for another 30 years is worth a fortune.

If I thought interest rates we're going to stay low as long as they have have, I would've waited until this year. That's where the gamble is. Like a good joke it's all about the timing.

I've not explained this very well but have you have got a final salary scheme asking for a transfer value is merely an enquiry. Your pension fund send these out all the time and it is not an application or an obligation. 

One pal from the post room found his 30 years were worth £800,000 as opposed to a pension of £22,000. His only problem was he nearly drank himself to death in the first year!!

For some it is like a pools sorry lottery win. Even if you have a small pension it may still be worth making the move.

Start by asking for a benefit statement from your employer and or ex employer. I only had 2. 

I moved the RBS one at £130,000 and I bought a mix of bonds, investment trusts and other shite. Greggs have been a great performer.

I once asked Alastair Darling in to the office as he was our local MP. I showed him around and said if I could do anything for our staff it would be to do the old Marx thing and get them to own the factors of production. Give them the company for free over a number of years. That we would probably open a single company  SIPP and give them some shares every year. If Labour could legislate for that then the workers would soon own their own companies and we wouldn't need to re-nationalise as the railway workers would own the trains etc. He said they didn't like share ownership after Maxwell and then in government did everything to encourage the privatisations while raiding the pension funds of the unions workers and the few rich people who weren't already offshore how fucking naive. 

I digress. We had one shot at the balancing out society after Thatcher and they all went over to the other side of the ship, taking us down with them.

This is why it's important that people get fair value from their pensions. Most people will not know how sleight of hand works. How the poorer in society are encouraged to glance of their shoulder at the poorest while the richest snaffle a few more Ten Bob notes off the table.

It drives me aff ma fucking trolley. I digress. 

There was a campaign in the 90's to get everyone to consolidate their pensions. It was called mis-selling later. What it did was to manufacture an issue so a solution could be manufactured.

They say that the service industry could replace manufacturing in this country but they were lying. Manufacturing still exists, but it's manufacturing or fabrication of nothing. Every time you'll notice somebody takes 3%, there's slicing all the way. Even in transferring your own pension to a SIPP you'll pay a tax of 2-3%, it's called advice, but even if you've already decided, you need to pay it. 

Half of that advice money goes into the pot for funding failed pension funds. The rest into the lucrative business of transferring funds.

Take my post room pal. He transferred £800,000. £24,000 was taken away but he still had £776,000. Fucking loads, as he said. As a rich person he was delighted to pay extra tax!  £12,000 goes into that pot and the other £12,000 went to the firm who typed the letter for him. What a great game to be in. Your customer says thank you for your help and tips you £12,000!

Ha ha the game just rolls on but even paying that money it may still be very worthwhile. 

You may have to fund your children or neighbours, so regard the pot not as your pension, not even you and your partner's, this is the family pot, your community pot. This is the wee stash of cash above the kettle. The miners are unlikely to go on strike again but when the nurses do, you've some cash for their jar! The SIPP ja should be invested but as the latest stock market crash is due 2022/23 get the cash and put it in the jar! 

Keep it safe and keep spreading the joy. What a great thought, we could do a crowd funding SIPP and buy a venue, recording studio and community hub....get our local tennis club to fill out the lottery funding forms then building the studio and venue on the end of the hut.....what joy.