Guest Blog - Final salary pension transfer values have reached record highs

Wednesday 21st June, 2017
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Industry news

Are you one of the millions of people who saved into final salary pension schemes? Then you have the option of transferring your savings to an alternative pension and accessing your pension before the 'normal pension age'.

While final salary or 'defined benefit' pensions pay a guaranteed income for life, they do not offer you the control or flexibilities that the alternative 'defined contribution' plans provide.

The introduction of the pension freedoms in 2015 mean by transferring, you can take multiple lump sums, structuring your retirement income to reduce your taxes and pass on the value of your pension to your spouse or children free of inheritance tax. In a final salary scheme, income is typically not paid after the death of the member's spouse.

Transferring from a final salary to a defined contribution pension means giving up a regular guaranteed income for a much larger lump sum, typically 25 times the promised annual pension coupled with the opportunity for a larger tax free lump sum at retirement.

Experts say we could be at or near the peak of the deals being offered to members to transfer out of a final salary plan. Schemes value their pension promises based on government gilt yields and other economic factors, the unprecedented low interest/yield rates are pushing the liabilities up, but how long will this last? Trump, Macron, Brexit these events all have expectations of higher inflation.

If you are concerned over the stability of your ex-employer, the fact that your fund may be under-funded or simply want to become more involved in how YOUR funds are invested, then transferring to an alternative arrangement should be considered.

A typical client profile for final salary transfer:

  • aged 55 or over
  • NOT taking income from your final salary pension fund(s)
  • have left and are no longer an active member in the scheme
  • has a need to take a cash lump sum or an additional income.

There's never been a better time than now to transfer your final salary pension. For the answer to any of the above, or any other occupation final-salary related query you may have, simply email gavin@havengsl.com or call the office on 0161 923 0009 to arrange a free, no obligation call.



Transferring from a final salary to a defined contribution pension means giving up a regular guaranteed income for a much larger lump sum, typically 25 times the promised annual pension coupled with the opportunity for a larger tax free lump sum at retirement.