Making the decision to transfer a DB pension can be difficult. That’s why by law, you’re required to seek advice from an authorised financial adviser for transfers over £30,000. The regulation is in place because a traditional final salary pension was considered the ‘best’ pension available on the market. But with changes in lifestyle, many people continue to work after their planned retirement. As a result, a defined benefit pension may not offer the best value for money.

Calculating the value of a final salary pension against a different pension scheme can be complicated. As we all learn in life, situations can change and are often different from what we’ve planned. For some the security of a DB pension outweighs the benefits of flexibility and legacy planning, it’s all subjective.

Due to the level of complexity, your best option is speaking with a qualified professional with a reputation for impartial, financial advice. Some examples of suitability are highlighted below:

If you have other forms of income such as investments or other pensions and don’t need to rely on your defined benefit scheme, a pension transfer might be right for you. For those who are managing wealth or tax planning, a final salary transfer may also be suitable.

If you have limited life expectancy and are considering passing on the wealth from your pension, a transfer may also be appealing. There’s a balancing act to consider should you have dependents under 23 years old or a partner who may receive (reduced) benefits. It’s also worth noting if you die within two years of a transfer, taxes will need to be paid.