Defined Benefit Pension Transfer Specialists

Careful retirement planning is crucial for you to achieve the financial and lifestyle goals you want when you retire. If you have thoroughly reviewed all your current pension arrangements, assessed all available options and concluded that a pension transfer might be the best course of action for you, it’s time to talk to Kellands Bristol.  

Talking to us early in the process makes sense as it is a very complex area and for many, a defined benefit (DB) pension transfer may not necessarily be the best option. This is because DB Pension Schemes, or Final Salary Pension Schemes, as they are also known, are generally considered to be the gold standard in the pension’s world.

Because of this, defined benefit pension transfer is only suitable for most people in certain circumstances, making it vital that you are in possession of all the facts before making any final decisions.

Since the introduction of the Pension Freedoms in 2015, the number of those looking to transfer out of DB schemes has increased significantly. On top of that, due to the escalating associated costs of running DB schemes, some are offering high cash equivalent transfer values (CETV) to encourage pension holders to leave. This figure has sometimes been as much as 40 times their yearly expected income. This has understandably led many more to seek DB pension transfer advice.

There are obviously advantages and disadvantages in transferring out of a DB pension scheme.

In terms of advantages, these include improved choice, flexibility and control. For example, it gives you the opportunity to have more income now when you are active and less in later life. It also gives you more flexibility to pass your pension savings on to family members. It could also be that your CETV is many times higher than the annual income a DB pension would generate.

It should also be remembered that remaining in a defined benefit pension scheme is not risk-free. Whilst your employer is still in business, it usually has to make sure the scheme has enough funds to provide the full entitlement to members. However, some employers sponsoring these schemes have gone bust, not leaving enough money to pay the pensions promised.

On the other hand, you’ll be giving up a guaranteed income that is likely to be linked to inflation, along with other benefits, such as death benefits for a spouse or partner. How important these are to you will depend on your personal circumstances. You will also now be responsible for what happens to your pension – which could be a good or bad thing, depending on your point of view and risk appetite.

So, if you are thinking of transferring your defined benefit pension, we can help. Our holistic approach to retirement planning, taking all your potential income streams and future expenditure into account, can help you gain an understanding of which option is right for you.

Please contact us today for an initial free and without obligation chat.

This information does not constitute financial advice. Everybody’s circumstances differ and regulated professional advice is required before proceeding with a pension transfer.