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Final Salary Pension Transfer

A defined benefit pension sometimes referred to as a final salary pension. This is where the amount of pension you’re paid at retirement depends on how many years you’ve worked for your employer, and the salary you’ve earned. They’re seen as very secure because the amount you get increases every year, and they’re guaranteed to pay out for life.

There are situations where you might want to transfer your defined benefit pension into another scheme. It could be because you want to retire before the specified age of your scheme or you’re changing job and won’t make any more contributions to your pension, for example.

The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.

Transferring out of a Final Salary scheme is unlikely to be in the best interests of most people.

What happens if I transfer?

Your pension will be converted into a cash sum, known as a ‘transfer value’, which must be invested in one of the following:

  • A personal or stakeholder pension
  • A pension scheme with another employer
  • A self-invested personal pension (SIPPs)

Defined benefit pensions can be complicated as they come with lots of benefits. And employers or companies running the scheme might offer you additional incentives to stay with them. If you transfer to another pension scheme, you might not get the same level of benefits. Making the decision whether to transfer can be difficult.

Getting help

Because of this, the law says you need to get advice from a financial advisor before you transfer if you’ve got more than £30,000 in your defined benefit scheme.

To talk to us about transferring your defined benefit pension, so you can go through your options and arrive at the right decision, the easiest way is to use the form on the right-hand side of this page.

You can give us a call if you prefer on 01244 47010 or send us an email to: 

Transferring out of a Final Salary/Defined benefit scheme is unlikely to be in the best interests of most people.

Tax treatment varies according to individual circumstances and is subject to change.

Tom Lenton

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