All you need to know about final salary pensions...

TRICIA PHILLIPS

WE’VE teamed up with Andrew Tully, technical expert at financial giant Canada Life, to answer some of your recent questions around final salary pensions.

Q

SHOULD I consider transferring my final salary/ defined benefit pension?

A

THERE is a basic rule of thumb which suggests you should only consider transferring your final salary pension in very limited circumstances – usually if you are very ill – although people have been keen to utilise the pension freedoms for more flexibility by moving away from DB pensions.

Q CAN I transfer funds without taking advice? A

ONLY in limited circumstances, if your pension has a transfer value of less than £30,000. As it’s a big decision, any transfer worth more than £30,000 will require you to get fully regulated advice provided by a specialist.

Q

CAN I change my mind about my pension transfer once enacted? A

NO. THIS is a once-in-a-lifetime decision and can’t be reversed, hence the extra checks and balances in place to ensure it is right for you, if you do decide to explore transferring.

Q

HOW much does it cost to transfer and how long does it take? A

FINAL salary pension transfers are complex and an adviser will spend time understanding your financial plans, goals and attitude to risk. This will take into consideration all of your individual circumstances, your needs throughout retirement as well as other savings and wealth, and therefore is thorough and will take time.

A typical adviser could charge in the region of £3,500 to provide the advice, alongside an ongoing fee to manage the money later.

Given the complexities, and the fact it is a specialised area of pensions advice, not all advisers are regulated to provide this.

A transfer can also take months to go through.