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PENSIONS & INVESTMENTS

Defined Benefit

A pension transfer from a Defined Benefit (salary-related) pension scheme means giving up your scheme benefits in return for a cash value.

Home Pensions & Investments Defined Benefit

DEFINED BENEFIT

Final Salary Pensions

A pension transfer from a Defined Benefit (salary-related) pension scheme means giving up your scheme benefits in return for a cash value, which is then invested in another pension scheme, known as a Defined Contribution (DC) scheme. In most cases you’re likely to be worse off if you transfer out of a Defined Benefit scheme, even if your employer gives you an incentive to leave.

Before you go ahead, it makes good sense to speak with an expert adviser in this area, who can provide helpful insight, first comparing the money you have been offered by your pension scheme against the value of the pension you are giving up, then creating a bespoke plan based on your personal circumstances and lifestyle aspirations should you decide to move forward.

Please note: Transferring out of a final salary or defined benefit pension is unlikely to be in the best interests of most people.

MITIGATING RISK

Our financial advisers specialise in retirement planning and options

A key consideration is your attitude to risk. If you take a cash transfer and shoulder the investment strategy yourself, the value of your fund is very likely to fluctuate. This could mean that your assets appreciate considerably, however you must also consider the potential impact should your investments perform badly. 

 

You may reduce the risk associated with investing in a DC pension or in a drawdown product via certain means, such as electing for lower-risk investments, however the potential returns may be lower as a result. 

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Sarah Kendell

AwPETR
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Jenny Loftus

AwPETR
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Paul Breaks

G60

Skilled management of the resultant investment pot is crucial in helping to mitigate the risks involved. Our financial advisers Sarah Kendell, Jenny Loftus and Paul Breaks specialise in retirement planning and retirement options. Each holds the recognised qualifications, AwPETR or G60, as pension transfer specialists.

Getting compulsory financial advice

You must get independent financial advice, by law, if you have a:

  • Final Salary or Career Average pension (known as a ‘Defined Benefit’ pension) worth more than £30,000 and you want to transfer it to a Defined Contribution pension scheme

  • Defined Contribution pension worth more than £30,000 with a guarantee about what you’ll be paid when you retire (eg a guaranteed annuity rate) and you want to give it up to do something else with your pot

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Speaking with a financial adviser makes good sense even if your pension is worth £30,000 or less and you wish to transfer it to a DC pension scheme. 

DEFINED BENEFIT

The Financial Options Group can help

Our team of qualified advisers can talk you through all the options and give you simple, uncomplicated advice to help you make the right choice for your circumstances.

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CONTACT US

Address: Stoneholme, 42 High Street, Walshaw, Bury BL8 3AN

 

Phone: 0161 764 9944

Email: contact@financialopts.co.uk

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Financial Options Group is a trading style of CJP Financial Services Limited, an appointed representative of Quilter Financial Services Limited and Quilter Mortgage Planning Limited who are authorised and regulated by the Financial Conduct Authority. CJP Financial Services Limited is registered in England and Wales. Company number: 06060099. Registered Address : 70 Market Street, Tottington, Bury, BL8 3LJ 

Tax planning, estate planning, inheritance tax planning, lasting powers of attorney, will writing, trusts, legal services, succession planning, some buy to let mortgages, commercial mortgages, conveyancing services, advice on cash in deposits, auto-enrollment, employee benefits, divorce advice and small self-administered schemes are not regulated by the Financial Conduct Authority.

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