Should I transfer my deferred final salary pension?
We set what your deferred pension pays in pounds a year beside what a transfer would give up.
We set what your deferred pension pays in pounds a year beside what a transfer would give up.
Transferring a defined benefit pension means giving up valuable guaranteed benefits, and a transfer will only be appropriate in some circumstances. A deferred pension, the one left behind when you change jobs, keeps those guarantees: the scheme still owes you an income from its normal pension age.
The advisers for this subject: Sunny Bharj and Tony Springer
Paid from the scheme's normal pension age, normally rising with inflation once it starts, however long you live.
The scheme normally keeps paying your husband or wife at a reduced rate after you die.
Pensions law requires most deferred pensions to be increased each year until they are paid, in line with inflation up to a cap.
In pounds a year, the age it starts, and how it increases once it is being paid.
What it pays after your death, and who qualifies for it under the scheme's rules.
Many schemes let you exchange some pension for a lump sum at retirement without transferring anywhere. The rate varies a lot between schemes.
The cash equivalent transfer value. Quotes are generally guaranteed for three months.
The transfer value is the lump sum the scheme will pay into a personal arrangement in place of the income it promised. After a transfer you carry the risks: that markets fall, that you live longer than the plan assumed, or that you draw too much early on.
A sponsor in difficulty is not by itself a reason to transfer either. The Pension Protection Fund provides compensation subject to its own rules and caps, so check what it would pay in your case.
By law only for safeguarded benefits worth more than £30,000, such as a final salary pension. Other pensions can be moved without it.
Read the answer →A fee or a percentage of the amount invested or transferred. Ask for the charge in pounds before you proceed.
Read the answer →You can, and 25% normally comes out free of tax. Taking taxable income cuts what you can pay back in to £10,000 a year.
Read the answer →A large transfer value is not by itself a reason to take it.
It is increased each year until it starts paying, under pensions law that links the increase to inflation up to a cap. Ask the scheme for the current figure and the date it was worked out.
Schemes set their own terms for paying a pension early, normally with a reduced income. The earliest age for most pensions is 55, rising to 57 on 6 April 2028.
Yes, where the transfer value is more than £30,000. The law requires regulated advice and the scheme will not process the transfer without it.
The cash equivalent transfer value: the lump sum the scheme will pay into a personal arrangement in place of the income it promised. Quotes are generally guaranteed for three months, and a large figure is not by itself a reason to take it.
Ask the scheme for its pension, partner's pension, tax-free cash and transfer value before the first conversation.
Independent Financial Adviser
Independent Financial Adviser
Your first call is with an Account Manager and is at no cost to you. Tell us what is on your mind: a pension you have lost track of, a fixed rate ending, a will you keep meaning to write.