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The #1 checklist you need if you’re considering a Final Salary Pension Transfer

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    We have put together a Final Salary Pension Transfer Checklist to show you the questions you’ll be asked to see whether it would be appropriate for you to transfer your Final Salary Pension. This is meant as a guide only and does not constitute advice on its own.

    You can fill this form out and send it to us, or our Qualified Pension Specialist will be happy to help you complete this form.

    If you’d like to know more why not download our Definitive Guide to Final Salary Pension Transfer

    1) Speak to a Qualified Pension Transfer Specialist

    If you are considering transferring your Final Salary Pension and it’s worth more than £30,000, you will need to assess your financial situation with a Qualified Pension Transfer Specialist.

    Make sure that your Financial Adviser has the required qualifications and regulatory permissions to carry out the work and give you the advice you need.

    You can use the MoneyHelper website to find an advisor. Top Tip: look for a firm that also holds the pension transfer gold standard badge to ensure you get the highest quality service.

    2) Do your own research

    Before you approach a pension transfer specialist for advice, do your research:

    Read the pension transfer gold standard and familiarise yourself with the process, know what good advice looks like and seek out a trusted specialist. Download a copy of our Defined Benefit transfer guide and educate yourself on both the risks, benefits and costs involved.

    3) Get clear on your retirement objectives

    It’s advisable to have a clear idea of your objectives before you speak to a financial adviser. The clearer you are on your goals, the easier it will be for them to help you or suggest alternative actions.

    Ask yourself:

    • What are the 3 most important things for you in retirement?
    • At what age do you want to retire?
    • What plans do you have for your tax-free cash?
    • Where do you plan to live in retirement?
    • Do you have any large purchases planned for retirement?
    • What sort of retirement do you want?
    • What are your financial priorities now and in retirement?
    • Do you want to leave a legacy, to whom?

    4) Have your financial information to hand

    Your pension transfer specialist needs to assess your suitability to transfer. They will require a large amount of information in order to do this. Save time and gather the right information beforehand, you’ll need

    • details of any existing pensions held by you and your spouse
    • up to date mortgage/debt amount
    • details of any assets owned by you and your partner
    • monthly outgoings & future expenditure estimates
    • details of any investments
    • state pension estimates for you and your partner

    5) Understand your risk profile

    Defined Benefit Pension Transfer is deemed high risk because it removes a guaranteed income for life, moving you into a defined contribution pension arrangement where your investment value can go down as well as up. In addition, you’ll be exposed to longevity risk: the risk you outlast your money and sequencing risk: where taking money out of your pension at a time of poor performance could effect your long-term financial performance.

    It’s important to understand your risk profile and how you will mitigate and manage the risks of transfer. Discuss this with your financial advisor.

    Final Salary Pension Transfer Checklist: Questions to ask your advisor

    Here is a list of things to ask your Financial Advisor/ Pension Scheme Administrator before you transfer your Defined Benefit Pension

    • Ask for a full explanation of the pension and cash sum benefits you will leave behind if you leave your final salary pension, including your options for early and late retirement.
    • You should receive a full explanation of the options open to you (along with the governing rules and tax treatment) for the personal pension fund that may be created for you after the transfer.
    • Ask for a full explanation of the key risks associated with transferring into a personal pension fund, as well as the risk of remaining in your current scheme.
    • Request a personalised critical investment return assessment. This will look at what investment return is required by your new personal pension fund to match the final salary pension you would leave behind.
    • Ask for an explanation as to how the Lifetime Allowance impacts your pension fund if you have a larger transfer value, or if you have opted for protection against the Lifetime Allowance. Ask about any changes to your protection that might be caused by the pension transfer.
    • Ask the adviser if, in their opinion, a final salary pension transfer is a sensible transaction for you: given your unique set of personal circumstances, and considering your future financial objectives, In order for your advisor to respond they will need to:
      • Understand your (and your family’s) financial position.
      • Make sure that you (and your spouse if applicable) have the financial resources to tolerate the risks implicit in transferring out of a final salary pension to a personal pension
      • Make sure you (and your spouse if applicable) are comfortable with those risks.

    N.B. If you are married or living with your partner, it is important to involve them in the process from an early point as this decision is likely to affect the financial future of you both.

    Simon Garber

    Simon Garber

    Simon Garber is an Independent Financial Adviser and Pension Transfer Specialist with over 15 years of experience. He's a member of the Personal Finance Society and holds the coveted Gold Standard for Pension Transfer Advice.

    He is the Managing Director of 2020 Financial Ltd, Financial Advisors specialising in Retirement Planning & Wealth Management, based in Southampton, Hampshire.

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    Final Salary Pension Transfer

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