If you have a final salary pension scheme (defined benefits pension) you may wish to review this to see how suitable it is to meet your retirement objectives before choosing to take benefits.
In many cases you are able move out of the scheme thus giving up your benefits in return for a one off transfer amount. You can transfer the one off amount to a suitable defined contribution scheme and manage the money yourself going forward.
There are many reasons you may wish to do this as well as many reasons you should not. If a guaranteed income in retirement is important to you and you do not like the idea of investment risk and managing your money then it is unlikely that this will be a suitable solution for you.
However, if you are comfortable with the possibility of fluctuating income and can accept investment risk a transfer to a defined contribution scheme may help you to chose a different shape of retirement income, pass on your pension wealth to nominated beneficiaries other than a spouse in the event of death or take part of your benefits such as tax free cash without the need for a regular income.
Before making any financial decision such as how to take your retirement benefits it is important to understand all your options, benefits risks and disadvantages and seek advice from a professional on the best outcomes for you. If you wish to transfer a defined benefit scheme with a transfer value in excess of £30,000 you must seek and evidence you have received financial advice prior to signing the transfer papers.
Independent financial advice – talk to our pension specialists
If you are looking for independent financial advice on a final salary pension scheme and are able to visit our offices in Harpenden or Hitchin please contact us. We have a number of pension specialists who are able to assist in the analysis of your existing scheme and work with you to see how this fits with your retirement plans or if there is a better solution to help in retirement.
It is better to contact us before you receive the transfer value as the regulation and detail of reports can mean in order to obtain all the relevant information for the existing scheme can take 8 – 10 weeks and beyond depending on the size of the pension trustees administration team and their ability to respond to information requests.
This is an irreversible decision if you decide to transfer so we want to provide as much advice and thinking time as possible for you to make the decision that suits you. It is quite possible that the existing scheme will meet your requirements and if so our advisers will detail the reasons why you should not transfer in a full report.