What is a Defined benefit/Final salary pension scheme?

When you retire, a defined benefit/final salary pension provides you with an income for life. You can usually work out your income from your percentage of salary and the number of years you’ve been a member of the pension scheme.  The employer guarantees a specific income amount after retirement, and may provide other benefits to the plan member, such as regular increases in benefits or provision for a spouse or dependents after death. Currently, defined benefit pensions are most common among private companies, public sector and government employers.

How is it different from a defined contribution pension?

It’s an alternative to a defined benefit pension. A defined contribution pension is one which consists of a financial contribution from both employer and employee, typically into funds, with the aim of making it grow in value. There are no guarantees that this will happen, and you could get back less than the amount invested.

Your Defined Benefit Pension will not be available until you reach retirement age. However, if you are in a Defined Contribution Pension scheme, this could give you access to your money from age 55, but there may be a financial cost.

Transferring your Defined benefit/Final salary pension scheme

You may be looking to transfer your defined benefit pension because you want the potential of higher investment returns. Yet before you take any action, it’s important to consider some important factors first. The government insists that appropriate financial advice from a suitably qualified adviser must be taken before you can transfer defined benefit pensions worth £30,000 or more. Make sure you know what consequences will result from your decision.

Before you decide to transfer your defined benefit pension, talk to one of our qualified Pension Transfer Specialist.

Why Defined Benefit Schemes are so valuable

• Defined Benefit Pensions provide a regular income for life
• You don’t need to worry about outliving your savings, getting sick and unable to work, or paying for expensive care at home.
• There are additional benefits included with some schemes too – like covering your spouse and dependent beneficiaries in the event of your death.

Reasons to consider a transfer of benefits

• It could be due to health reasons, personal reasons
• Worries about your former employer’s financial stability.
• With a transfer, you’ll also be able to change your life in ways that may not be possible any other way.
• You can achieve something completely new–whether it’s more income, more freedom or the peace of mind
• Knowing you’ll leave a legacy behind–we’ll be there every step of the way.

Important considerations if you are thinking about transferring.

You need to make sure that transferring your pension is the right decision for you. In order to ensure your financial security in retirement, you should be sure that:

• You have a plan
• What you plan to do with your money
• You have enough resources to support the rest of your retirement without a pension
• You know how to manage investments
• You are willing to accept a lower income if your investments do not perform as well as expected
• You’ve considered other ways of achieving your objectives.

Are you considering transferring? Let experts give you expert advice!

Our Pension Transfer Specialist can provide personalised retirement advice based on your circumstances.

We will also take care of all the paperwork, simply call us and find out how we can help you make a smart decision that will benefit you in the long term.