The Telegraph, Sunday 16 April 2017
Savers risk being caught up in a mis-selling scandal over “final salary” pension transfers, experts warn.
There has been a surge in “transfers out” of final salary (also known as “defined benefit”) schemes since April 2015. The transfers are generally undertaken in order to give savers greater control over how the money is used. They can also reduce inheritance tax bills.
In addition, the value of offers to give up the guaranteed income of a final salary pension has increased dramatically because companies are keen to offload the rising costs of funding these promises.
In some cases offers of up to 50 times the value of the annual income have been made. In other words, someone with a pension income starting at £12,000 might be offered as much as £600,000 to give it up. And for some, taking the cash might be the best bet.
But there are fears people are being caught out by opportunistic middlemen whose advice is not entirely impartial. These advisers may benefit, for example, from fees related to how the money is invested in future or merely for effecting the transfer. It is a requirement in law that anyone wishing to transfer a pension worth more than £30,000 seeks financial advice.
The experience of a Tideway client is described in this article, which can be read by clicking the link below.