Par­tial trans­fers mean you can side­step costly fi­nan­cial ad­vice

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trans­ferred. That same ra­tio would be ap­plied to a par­tial trans­fer, so you could turn £333 of an­nual in­come into £10,000.

As well as al­low­ing you to keep some guar­an­teed (and in­fla­tion-linked) in­come, this op­tion would have the ad­van­tage of avoid­ing the re­quire­ment to seek fi­nan­cial ad­vice on trans­fers worth £30,000 or more. The Fi­nan­cial Con­duct Author­ity, the City watch­dog, con­firmed that this was a le­git­i­mate way to side­step the rule.

It can be dif­fi­cult to find ad­vis­ers will­ing to do this kind of work. Fees are also high – it can eas­ily cost £2,000 for a £100,000 trans­fer. Some firms will charge sim­ply to pro­duce a re­port, whether or not a trans­fer goes ahead. By trans­fer­ring small amounts the has­sle and costs of find­ing an ad­viser would dis­ap­pear.

Tom Selby of AJ Bell, the in­vest­ment shop, said par­tial trans­fers would re­move the “all or noth­ing cliff edge” that savers cur­rently face and would help ad­vis­ers feel more con­fi­dent about rec­om­mend­ing a trans­fer “when they know the en­tire guar­an­tee is not be­ing ditched”.

One reader, Richard Austin (pic­tured), said ad­vis­ers had re­fused to speak to him be­cause they didn’t think they could rec­om­mend a move.

The few com­pany schemes that do of­fer par­tial trans­fers tend not to ad­ver­tise the fact. Trans­fers can be com­pli­cated and costly for them to ad­min­is­ter. They may also re­strict how many times par­tial trans­fers can be made to stop savers treat­ing their pen­sions like a cash ma­chine.

For that rea­son it tends to be the largest schemes that of­fer par­tial trans­fers, of­ten only to mem­bers with larger en­ti­tle­ments. In many in­stances the pen­sion scheme trus­tees will de­cide whether to al­low par­tial trans­fers on a case-by-case ba­sis.

How­ever, there can be ad­van­tages for the pen­sion schemes them­selves, many of which are run­ning large fund­ing deficits. When a trans­fer, full or par­tial, is made out of a scheme, the cost of ser­vic­ing the re­main­ing li­a­bil­i­ties falls.

A spokesman for the De­part­ment for Work and Pen­sions said giv­ing savers a le­gal right to a par­tial trans­fer would re­quire a change in pri­mary leg­is­la­tion. This would re­quire find­ing suf­fi­cient time in the par­lia­men­tary cal­en­dar, al­ready squeezed by the de­mands of Brexit. He said the Govern­ment be­lieved that the cur­rent sys­tem, which gives trus­tees the choice of of­fer­ing par­tial trans­fers, rep­re­sented a “good bal­ance”.

The Royal Lon­don/ LCP re­port also high­lighted other ar­eas where pen­sion savers were not be­ing given valu­able in­for­ma­tion.

For in­stance, nearly all final salary schemes have an op­tion for peo­ple no longer sav­ing into the scheme, known as “de­ferred mem­bers”, to take early re­tire­ment. While this en­tails a smaller pen­sion, it could help bridge any in­come short­fall, such as the years be­fore the state pen­sion is due.

But most schemes do not tell savers about this op­tion. In fact, most don’t make con­tact with mem­bers at all un­til they ap­proach nor­mal re­tire­ment age, usu­ally 60 or 65.

Since April 2015 the pen­sion free­doms have al­lowed any­one over the age of 55 to take all or some of their pen­sion as cash.

How­ever, these ben­e­fits, in­tro­duced af­ter years of pres­sure from cam­paign­ers, ap­ply only to de­fined con­tri­bu­tion pen­sions. These are now the dom­i­nant form of pen­sion sav­ings, but mil­lions of peo­ple hold most of their sav­ings in final salary schemes.

These schemes do not of­fer the pen­sion free­doms and it is this that has driven the boom in trans­fers. At the same time, low in­ter­est rates have also pushed trans­fer of­fers to very gen­er­ous lev­els.

Richard Austin, 65, strug­gled to move a £5,000-a-year final salary pen­sion

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