4 Questions to ask yourself before you transfer your Final Salary Pension2018-11-26T11:38:22+00:00

4 Questions to Ask Yourself Before You Transfer Your Final Salary Pension

Final Salary Pension Transfer is a complex business. It requires you to give up certain and guaranteed benefits in exchange for different freedoms and benefits that also come with risk attached.  

Your reasoning has to be sound and thought through –  the answer is not always black and white but it comes down to your personal situation and your individual goals. There is a lot to consider before you transfer your final salary pension but here are four questions you should be asking yourself before proceeding with a final salary pension transfer:

1. Is the value of your pension transfer ‘generous’ and fair versus the pension benefits you leave behind?

It is important that your pension transfer estimate (or Cash Equivalent Transfer Value CETV) represents at least fair value and is ideally ‘generous’ versus the pension benefits you leave behind.

Whilst the transfer value, as a lump sum, may sound like a lot of money, it is important to look at it objectively. With a personal pension, you will have to allow for the impact of inflation. There is the added risk that your investments can, and do, go down as well as up. Your personal pension fund could run out, versus a final salary pension that is guaranteed until your death. So you need to make sure that your calculations, based on the transfer amount, will allow you to meet your financial goals for the rest of your life. If there are dips in the market will you still be able to live comfortably?

2. Can you make better use of the flexible withdrawal options offered with a Personal Pension?

One of the key reasons why you may consider transferring your final salary pension is that you believe you can you make better use of the flexible withdrawal options offered by the transferring into a Personal Pension as compared to the options you have when remaining in the Final Salary Scheme.

If you do have other savings and investments, the ability to control your pension income, from one tax year to the next can often help you to be more tax efficient.

There are lots of ways in which individuals might want differing benefits to those offered by the scheme for example:

  • It suits you and saves you tax to be able to take the cash sum early and defer the income withdrawal
  • The transfer is big enough that you can preserve its capital value and leave a tax-free inheritance whilst still have enough income in retirement
  • The guaranteed income offered from the Final Salary Pension is surplus to requirement; therefore the option to move this into a pension that has a cash value is more attractive, due to the flexibility and also the ability to pass wealth onto your family and loved-ones.
  • Larger transfer offers can be compelling because they often belong to people with other assets and income such that they don’t need a guaranteed income in retirement and would prefer to use the transfer value in a completely different way, for example, to preserve its value as part of the family assets, donate to charity or help children get on the housing ladder etc.
  • Smaller transfers can also make sense where there is a clear way to use the money which makes more sense to the individual than to take the lifetime pension, for instance clearing a mortgage.
  • Ill health can be a compelling reason for some. If it’s clear your life expectancy has been shortened, then the chances are you and your family will get more cash from a transfer than staying in the scheme.

3. Are you comfortable with the extra responsibility of looking after an invested fund?

Unless you are a sophisticated investor, you will need to work with a financial adviser to manage and maximise your money to make sure you achieve your retirement goals. This will incur on-going costs so you need to be fully aware of these costs and be comfortable with them.

4. Can you cope financially if your pension pot gets run down?

If your Pension fund does not grow as expected, goes down or if you live longer than expected could you cope with a lower level of income later in life?

Generally, individuals will spend more in early retirement and less as they get older. That said, you may need to consider care home or assisted living costs in later life. It is important to know how you will cope if your investments don’t grow as you’d hoped and your pension pot gets run down.

Having other savings, sources of income and capital in retirement is a good way of mitigating the investment and longevity risks of going down the pension transfer route. Examples of such investments include:

  • Other private pensions, including your spouse’s pension
  • Your state pension
  • Any ISAs and savings you may have
  • Property – your home and any investment properties you own
  • Stocks and shares
  • Premium Bonds

With all these in mind, does a final salary pension transfer still make sense?

To Transfer or not to Transfer – other considerations

  • Before deciding to transfer out of your final salary pension it is crucial you examine your entire financial standing. This includes any other pensions you may have, any investments, any savings accounts, or properties you and your spouse may have, as well as any state pension payments you are entitled to. It is essential to look at the whole picture and think deeply about how you will manage your future wealth. Your decision may affect your long-term ability to support yourself and your loved ones.
  • Don’t make any knee-jerk decisions. Remember, Financial advice from a qualified Pension Transfer Specialist is a regulatory requirement for transfers of £30,000 or over, but is also highly recommended for smaller transfers too. In this new era of retirement planning there is everything to play for – so don’t dismiss any choices out of hand until you’ve been suitably informed.
  • It is also important you don’t feel pressured. You can transfer your final salary pension at any point. Unless you are about to retire, you can leave it for another time, if you are currently unsure how to proceed.
  • Understand that there may be other options available to you to help you reach your financial goals that don’t require you to transfer out of your Final Salary Pension. e.g. If you are concerned that your partner would receive less income in the event that you die before them, you could consider a life insurance policy to make up the shortfall.
  • It pays to be informed. Whether or not you are currently considering a pension transfer, you should request a transfer value analysis then ask your financial adviser to give you an independent assessment of your various alternatives.


Sometimes it’s just nice to talk to a human. Especially when that person is a Qualified Pension Transfer Specialist with experience of Final Salary Pension Transfers. We offer a free, no obligation, 20-minute call with one of our specialists. Pick our brains, get your questions answered and find out how to get started or arrange an introductory meeting to get the ball rolling. Call us on 02380 981161 or contact us below.

Contact us

Frequently Asked Questions

Got a Question? Speak to a specialist
How to choose a Financial Adviser for a Pension Transfer2018-01-17T15:04:40+00:00
FAQ Financial Adviser

If you are considering a Final Salary Pension Transfer chances are that you will need to choose a Financial Adviser to help you. It is a regulatory requirement for Pension Transfers over £30,000 that you receive advice from a Qualified Pension Transfer Specialist.

It is important to understand that this is not just a box-ticking exercise, your Financial Adviser will need to carry out in-depth analysis on your financial situation and will have to provide a personal recommendation in order for you to transfer your pension. If they believe that it is not in your best interests to do so, you will not be able to transfer out of your scheme. They will provide you with the reasons why. This process is designed to protect you and your money.

If you proceed with a Final Salary Pension Transfer you will be taking over the responsibility for how your pension pot is invested so it’s likely that you’ll be working with your financial adviser for a long time, it’s important to choose someone qualified, experienced, trustworthy and someone that you are happy to work with on an on-going basis.

How to choose a Financial Adviser – Important things to check

  • Are they authorised by the FCA?
  • Are they a pension specialist?
  • Do they have experience of Final Salary Pension Transfer?
  • Can they provide references?
  • What are their charges initial and ongoing?

Are they authorised by the FCA?

Make sure that the person you are dealing with is authorised by the Financial Conduct Authority (FCA) and qualified to advise on Pension Transfers. This is a highly specialised field that requires professional qualifications. You can check whether your Financial Adviser is authorised to carry out this work on the Financial Conduct Authority (FCA) register.

What to look for on the FCA register?

Firstly that the company’s status is Authorised.

Secondly, under permissions you should see a box that says ‘Advising on Pension Transfers and Pension Opt-Outs’ If the firm you are dealing with is not authorised to give advice, you should find a local Pension Specialist who is. If in doubt, you can contact the FCA.

Here is our FCA register entry https://register.fca.org.uk/ShPo_FirmDetailsPage?id=001b000000NMODtAAP

Do they have experience of Final Salary Pension Transfer?

Check that your Financial Adviser has relevant experience with Final Salary Pension Transfer. You can ask for references from existing Pension Transfer clients.

Ask them for details of their process. Who will be your contact? How will they keep you updated etc? It’s best to understand this now.

How much does your Financial Adviser charge?

Be sure you know how much your transfer is going to cost – now and in the future. Financial Advisor fees vary massively. Ask what fees will be incurred for

  • The initial research and report
  • Carrying out the transfer
  • Costs for investing your money in a personal pension
  • On-going management fees etc

It makes sense to shop around for the best deal, especially when it comes to on-going fees as these can make a big difference over time. Don’t be afraid to negotiate – it always helps if you know what other local advisers are charging for similar work.

You can find details of our charges here

Do your homework and be thorough. It’s important to find the right Financial Adviser for you.

Talk to a Financial Adviser

Free Resources

You will need to speak to a professional but if you are considering transferring your Final Salary Pension, there are a number of free resources we would encourage you to take a look at.

The Pension Advisory Service (TPAS) 

Set up to provide free professional, independent and impartial help with their pensions

Pension Wise

A government website providing information about the Pension Changes and options for Personal Pension Holders and those with workplace pensions.

Money Advice Service

A great resource for money advice. It also contains a handy budgeting tool.

Pension Protection Fund (PPF)

Provides details about the scheme set up to compensate those with Defined Benefit (Final Salary) Pension Schemes if their scheme collapses.

We’ve also written some helpful pieces on our blog including ‘How much do I need to Retire’


Sometimes it’s just nice to talk to a human. Especially when that person is a Qualified Pension Transfer Specialist with experience of Final Salary Pension Transfers. We offer a free, no obligation, 20-minute call with one of our specialists. Pick our brains, get your questions answered and find out how to get started or arrange an introductory meeting to get the ball rolling. Call us on 02380 981161 or contact us below.

Contact us
What happens to my Defined Benefit Pension if my employer goes bust?2018-01-17T15:07:55+00:00

A Defined Benefit Pension, AKA a Final Salary Pension guarantees to pay its members a defined amount per year, for life. However, it’s a common concern “What happens to my Defined Benefit Pension if my employer goes bust?”

The answer is that it depends on the circumstances and what is agreed between the Pension Scheme Administrators and its members and/or whether there is any government intervention. The likely outcome is, if your Final Salary Pension Scheme is eligible, that you may be protected by the Pension Protection Fund (PPF) which acts as an insurance policy should your employer’s pension fund get into trouble or if the business goes bust in the future. You’ll generally receive a maximum of 90% of what your pension was worth at the time, up to £34,655.05 per year, a figure set by the Department for Work and Pensions (DWP). 

You can find out more on the Pension Protection Fund website or read our blog post What is the Pension Protection Fund

What happens to my Final Salary Pension if I die?2018-01-17T15:09:31+00:00

It’s a big concern for some people, ‘what happens to my loved ones if I die?’ Will they be provided for?

Whilst you cannot transfer the full amount of your Final Salary/Defined Benefit Pension fund over to a Spouse if you die, There’s normally a provision made by the Pension Scheme Administrator for a Spouse and dependent children. The amount they will receive varies from scheme to scheme.

If you’re not married and don’t have dependent children then your pension pot gets absorbed back into the employer’s pension fund when you die. Unlike a Personal Pension, you cannot pass it on or nominate someone to inherit it.  

** December 2017 update – due to a successful legal challenge it may now be possible for ‘common-law’ partners to make a claim for part of your pension if you die. see the links below for details of the cases

Unmarried woman wins automatic right to late partner’s pension


Same-sex couple win landmark Pension Equality case


How do I get a Pension Transfer Estimate?2018-01-17T15:10:18+00:00

Your Pension Fund amount and the Transfer amount (known as the Cash Equivalent Transfer Value or CETV) are not the same thing. You should receive an annual update from your Pension Scheme Administrator that contains this information but if you do not have an up-to-date estimate you will need to request your Cash Equivalent Transfer Value (CETV) from your Pension Scheme Administrator

You might also like…

The definitive guide to final salary pensions
Final Salary Pension Calculator
final salary pension when I die


This guide does not constitute personal advice, nor should it be treated as such. It is provided for general information and it is vital (and in most cases a regulatory requirement) that you contact a Qualified Pension Transfer Specialist for personal financial advice and obtain a recommendation to transfer before opting out.

  • If you are a member of a pension scheme with safeguarded benefits, it is likely it would be in your best interests to retain the safeguarded benefits.
  • Make sure you understand all the risks before investing.
  • The value of investments and the income they produce can fall as well as rise and you may not get back your original investment. Once you transfer, you will become responsible for the management of your investments.
  • Any information contained within this website should not be deemed to constitute investment advice and should not be relied upon as the basis for a decision to enter into a transaction, or as the basis for any financial or investment decision. Investors should always seek professional advice in regard to the suitability of any investment.

People who receive financial advice are on average £40,000 better off than their unadvised peers

Research by International Longevity Centre-UK (ILC-UK), 2017

9 in 10 people were satisfied with financial advice received, with the clear majority deciding to go with their adviser’s recommendation.

ILC-UK, 2017
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