Guaranteed CETV - how will they have changed?

[elkay]

In August, I received CETV for my two DB pots. The guarantee on the transfer values expires on 10 November.

I intend to transfer out one of the pots, the smaller one. However, before I make that step I am wondering how the CETV might have changed if I request new figures now - is there a chance I could get a better transfer out value?

From what I understand reading this forum and elsewhere, the CETV is affected mainly by gilt yields, and inflation rates.

From what I can see,
- gilt yields have increased in the last 3 months, and this is likely to negatively any new CETV.
- inflation forecasts have risen, and this is likely to have a positive influence on CETV.
- however, I believe there is a cap on the inflation related increases to my defined benefits pension - so presumably this would reduce the positive influence of inflation rates on the CETV.

On balance, I probably should proceed with the current guaranteed values.

But is my brief and uneducated analysis correct, and are there any other factors to consider?

I'm in awe at the amount of knowledge on this forum, and would appreciate any thoughts that might have a bearing.

elkay

[elkay]

As soon as I posted, I thought about a supplementary question...

I retire in December, but do not intend to put the larger pot into drawdown until April when I turn 60, as the benefits would be affected by c. 1% reduction if I started drawing in December.

Will the factors that affect the CETV have any bearing on the commutation rates on the PCLS?

[Alaric]

Will the factors that affect the CETV have any bearing on the commutation rates on the PCLS?

They might, but commutation rates tend to be set in stone for long periods of time. They also have a reputation for not being market consistent values, instead tilted in favour of the scheme.

[mc2fool]

I don't know if your CETV would go up, down or stay the same on a requesting a new one, but be aware that many/most schemes will only give you one CETV per 12 month period for free, and will charge you for any subsequent ones. £200-£300 is typical, so worth checking....

[elkay]

I don't know if your CETV would go up, down or stay the same on a requesting a new one, but be aware that many/most schemes will only give you one CETV per 12 month period for free, and will charge you for any subsequent ones. £200-£300 is typical, so worth checking....

Good point, in my case it is £250. However I wouldn't be requesting a new quote unless I had a reasonable expectation of a significant improvement. To give a flavour...the values provided in an estimate in March were improved by 20k in the guaranteed values provided in August. Maybe I hit a peak then...

Another factor might be the hassle and possibly increased cost for my IFA to update his recommendation, though the effort is likely to be small.