Final Salary Pension Transfer
Looking for advice about final salary pension transfers (aka defined benefit pension transfer)
Giving up your guaranteed income will have implications for the rest of your life, therefore best advice is vital!
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Get Regulated Advice Before You Transfer
Considering the transfer of a final salary pension is a decision not to be taken lightly! At Financial Fortress, your dedicated expert will start from the position of staying put, before getting to know you and helping you understand the many pro’s and con’s. If you do decide to transfer, the decision is irrevocable after all!
Death benefits, flexibility, early/late retirement, investment planning and shape of income are all factors to consider and if you want to investigate whether a transfer is right for you, we work with carefully selected, FCA approved partners who will advise you on any proposed final salary pension transfer scheme on a fixed fee basis.
What is a Final Salary Pension Transfer?
A final salary pension transfer also known as defined benefit pension transfer is when you basically trade in your guaranteed pension income and transfer a Cash Equivalent Transfer Value (CETV) to a defined contribution pension scheme. Rather than taking a fixed, guaranteed and every increasing (inflation-proofed) income for life, you gain control of your funds and take the responsibility for not running out of money.
Final salary pensions are a type of workplace pension, perhaps from previous employers and they tend to be extremely generous – hence many have closed in the past few years. Rather than having a fluctuating fund value, they offered accrual of a guaranteed income based on your salary at date of leaving or retirement. The risk for providing the income rests with the scheme and not you.
Possible reasons you may consider transferring:
- Unlock and withdraw more tax-free cash than your company scheme would allow
- Take just your tax-free cash and defer taxable income to a later time
- Or take your tax-free cash as a series of lump sums (as opposed to one large sum)
- Alternatively take your income as lump sums (as opposed to monthly)
- Therefore, increasing flexibility (entering drawdown)
- Retire earlier (than your schemes Normal Retirement Age (NRA)
- Improve lump sum death benefits to your family
- Cash in your entire pension (from age 55) – although you may pay huge amounts of tax
- Privacy from your ex-employer and removing any trust issues
Pension Transfer Risks
Losing guaranteed income – A guaranteed income for life is seen as gold standard for pensions. Giving up your guaranteed income for life by releasing your pension earlier could leave you with reduced income in retirement.
Investment risks – Your pension pot (post transfer) can go down as well as up dependent where the funds are invested and how the stock market is performing.
Management – you will be responsible for managing your own pension pot, pension provider charges, transfer fees and ultimately the shape of withdrawals.
What you get with Financial Fortress
Authorised and Regulated by the Financial Conduct Authority.
“What a fantastic service highly recommended. Financial Fortress arranged my pension transfer under very difficult circumstances and I am full of praise for their professionalism and courtesy in keeping me informed every step of the way. Many thanks to all the team. 5* review without a doubt.”
Paul, Vicars Cross