Pensions – stay put or transfer?

Every financial decision you take is based on shifting sands. You can never assume that what you believe to be the best advice today will be the same tomorrow.

Within the past two years, there has been a surprising change to the once universal advice that anyone in a final salary pension scheme should hang on to it. Now some advisers are recommending that people in certain circumstances could end up better off if they switched out of the company scheme into a personal pension.

I must emphasise that, for most people, staying put is still by far the better decision. But there are now arguments in favour of transferring, as one Oldie reader’s experience shows.

The reason is that transfer values – the amount of money that company pension fund trustees give you when you leave their scheme – have risen sharply, by as much as 40% in some cases. This is broadly because interest rates and gilt yields are low, and employees need to receive more money from the company scheme to afford an equivalent personal pension.

This is a momentous decision and