If you are in the British Steel Pension scheme, then you know you have some serious decisions to make….. They are outlined below;
1 – Do Nothing, stay in the scheme. The expectations are that the scheme will go into the Pension Protection Fund (PPF) in the not to distant future.
What does this mean though?
Well, the PPF will pay 100% of your pension if you are already taking your pension. It will pay 90% of your pension up to a cap of £38,505.61 if you are not currently taking your pension. A few details as well is that the PPF is not as generous in the future increase of your pension. Once in the PPF you cannot cash in your pension or transfer it for a cash value. That being said the PPF could offer a more generous tax free lump sum.
2 – Move to the new British Steel scheme. You have until 11th Dec to decide.
Is this a good option?
Well the scheme is not as good as the old scheme, the increases are not as good but the reason for going this route is to stay out of the PPF and pay more generous benefits than the PPF would.
3 – Transfer your money elsewhere. Take your money and run.
Sounds great, where is the catch?
You may have been offered a large Cash value and would like to take it and leave, along with the £200m other money that has left the scheme. STOP, is this the right move…. Its a big decision. There are so many factors to consider and this is where advice is invaluable. The fact is, advice at this point is necessary if you have over £30,000 or you cannot take the transfer. I explain here why the advice is a good thing and ultimately is worth paying for.
Of course all of the above might be almost impossible for any member to work out because the trustees of the pension scheme have been unable to provide the correct data to many members often omitting large chunks see here. Pensions are complicated enough without the scheme adding to all this.
At Arthur Browns, we are always willing to chat with any scheme members who might have some questions about the scheme itself.
My father in law was a British Steel member and we transferred him out of the scheme two years ago, only a small pot but my wife’s family is so thankful that we did. Unfortunately, he passed away this year and the money was his legacy for his kids and helped pay for the expense of his funeral and other things.