Falmouth Packet Business Jan ’18 – To transfer or not?

To Transfer or not to Transfer

There has been a great deal of press coverage in respect of Defined Benefit Pension Scheme transfers. These are transfers from what has often been regarded as “gold-plated” index linked final salary schemes to a personal pension.

With “pension freedom” providing greater flexibility and attractive transfer values, many individuals are assessing their current arrangements.

It is of course tempting to be offered such a large sum of money but whether a transfer is appropriate will depend on a number of factors including the terms offered under the contact, personal situation, state of health and attitude to investment risk.

If you are thinking of transferring your pension, it is important to consider what benefits you may lose, such as a dependents pension, guaranteed (*) index linked income for life and what will happen if the company go bust (protection limits apply).

One of the reasons people transfer to a personal pension is flexibility, such as drawing benefits early or phased retirement. In addition, benefits left in the scheme can be passed on to family after death.

This is an extremely complex area and it is vitally important to seek independent advice from a pension specialist before any transfer takes place.

(*) subject to financial strength of scheme

This article does not provide individual financial advice and are the views of the columnist only. Vision Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Sarah Williams of W.T Independent Financial Planning is an Appointed Representative of Vision Independent Financial Planning Ltd

Article January 2018