Final Salary Transfers

A Final Salary (or Defined Benefit) Transfer involves exchanging your pension entitlement for a cash lump sum which must be put into a registered, or HMRC recognised, pension scheme.

• If you are aged 55 or under -> you can transfer into a Personal Pension Plan and invest in one or more funds in line with your objectives and attitude to investment risk. At age 55 you can then move into Flexi-Access Drawdown (Pension Drawdown) or purchase an Annuity.
• If you are aged 55 or over -> you can transfer into Flexi-Access Drawdown (Pension Drawdown). You can choose to take up to 25% (a quarter) of your pension pot as a tax-free lump sum. The rest is then invested in one or more funds within your pension, and you are able to take a taxable income at times that suit you. Typically, people use it to take a regular income.

You choose investment funds that match your objectives, attitude to risk and set the income you want. The income you receive may be adjusted periodically depending on the performance of your investments.

Once you’ve taken your tax-free lump sum you can start taking income right away or wait until a later date.

There are number of advantages to transferring your final salary pension into drawdown, but there are also some disadvantages, for example you are giving up a guarantee but gaining the ability to pass money onto your loved ones on death.

Working with a suitably qualified Adviser to understand both the advantages and disadvantages of final salary transfers and whether they are right for you is extremely important.

If you take advice with us, we will give you one of two outcomes:

• We can show that the transfer is clearly in your best interests and suitable for you.
• We cannot show that the transfer is in your best interests so we believe that remaining in your current scheme is suitable for you.

We have been advising clients on Final Salary Pension Transfers since 1999 and are specialists in this field.

In order to provide advice on Financial Salary Transfers, advisers must hold The CII Certificate in Pension Transfers (Formerly Advanced Financial Planning Certificate "AF3 Qualification" and before that "G60"). At The Pension Drawdown Company we offer the professional services of four Financial Planners holding this prestigious qualification (meet the team).

Factors to consider when deciding whether a Final Salary Transfer is right for you.

Both options are provided for comparison, each have their benefits and which one is appropriate in meeting your long term needs depends on your personal circumstances.

Your relationship with your advisor is a key part of feeling confident about your pension and making sure you continue to be correctly invested. It is important to remember that markets go down as well as up and that the value of your fund may go down and up as a result. Your advisor is there to make certain you understand the risks of investing and ensure you are invested at a level that is commensurate with your attitude to risk.