Defined benefit pension transfer advice

final salary transfer is officially known as a defined benefit pension transfer. If you were a member of a defined benefit pension scheme, with an old employer, in most cases you can exchange your pension for a cash equivalent lump sum paid to an alternative UK registered pension. Most people transfer to a personal pension plan.

Choosing to transfer your pension is a big, irreversible decision and Tideway are authorised and qualified to provide the specialist transfer advice to assist you in making decisions and considering your options. If your transfer value is more than £30,000 you are now obliged by law to seek advice from a specialist adviser like Tideway and will be prevented from transferring before this advice is completed.

You can view our free guides and tutorials for further information about defined benefit pension transfers.

Why consider a defined benefit pension transfer?

Three reasons to consider a DB pension transfer:

  1. Generous pension transfer values:
    Exceptionally low interest rates have led to high transfer amounts for defined benefit pensions.
  2. Flexibility:
    After the tax-free cash sum you can now take as much (or as little) taxable income as you want from a personal pension fund (known as flexible drawdown) in order to match your personal spending requirements and plans for tax-efficiency.
  3. Pass the pension on:
    New rules allow unused pension funds to be passed down the generations, bypassing inheritance tax, but still subject to income tax.

Three important features of a defined benefit (DB) pension you will lose if you transfer:

  1. Guaranteed income:
    DB pensions generally provide a fixed level of income increased each year to a limited extent by inflation. This income is guaranteed by the scheme and to an extent via a scheme wide insurance plan if your particular scheme can’t meet its liabilities.
  2. Lifetime income:
    The income will be paid for life no matter how long you live and, usually at a reduced amount, to a qualifying spouse for their life.
  3. No costs and few risks:
    With a DB pension your old employer carries all the costs and risks of delivering the pension. If you transfer these shift entirely to you.

Three things to watch out for:

  1. High initial costs for advice and account setup.
  2. High ongoing costs that eat into investment returns.
  3. Inappropriate pension schemes investments that put your pension fund at risk.

How our defined benefit transfer advice works

Tideway's qualified pension advisers are here to help you every step of the way:

  1. Tell us a few details about your DB pension scheme. Use our enquiry form or call Tideway on 020 3143 6100.
  2. Receive general guidance about the Defined Benefit transfer process and our advice.
  3. Meet with Tideway to discuss your plans in more detail or talk over the phone.
  4. Receive your in-depth suitability report.
  5. Where a transfer is recommended, decide whether to agree to the pension transfer. Tideway conducts the transfer for you, liaising with all relevant third parties on your behalf*.

*Fees disclosed prior to advice and confirmed in your suitability report.

Next: Understanding your Cash Equivalent Transfer Value →

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Tideway Investment Group comprises the following entities: Tideway Investment Partners LLP and Tideway Wealth Management Limited. Tideway Wealth Management Limited is an appointed representative of Tideway Investment Partners LLP, which is authorised and regulated by the Financial Conduct Authority. FCA number: 496214.

Tideway Investment Partners LLP
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