Defined Benefit

Working for one employer for the entirety of your career and building up a company pension with that employer is extremely rare today. Even more so is having a pension based on how long you worked for, how much you earned and the incredible benefit of having a guaranteed pension amount. Some are lucky to have these types of pensions called defined benefit or DB pensions, however when it comes to making decisions on what to do with your DB pension it can be extremely complex.

You are required to seek independent financial advice if the value of your pension is more than £30,000 before deciding whether or not to transfer away from your existing scheme. This advice must be provided by a specially qualified pension transfer specialist.

There are a number of advantages and disadvantages with anything and this is very true of a DB pension

The prospect of transferring may be particularly compelling especially with enhanced transfer values and the flexibility to maximise tax-free cash or wanting to pass on unspent pension to your heirs.

However, some want the certainty that a DB pension provides and want to stay with the existing scheme and not transfer. As it will give them the guarantee that their pension will last as long as they do.

We are neither promoting DB pension transfers nor seeking to discourage them, the sensible assumption is that you are likely to be worse off if you transfer out of a defined benefit scheme. However, if you would like to find out more or speak with one of our advisers, please contact us.