Bribes to quit gold-plated pensions rise by a fifth

FIRMS are luring staff out of expensive final salary pensions by offering them up to one-fifth more cash than a year ago.

Savers have been stampeding to cash in their gold-plated pensions under new rules which allow customers to take their retirement pot as a lump sum.

Advice firm Old Mutual says that savers are typically being offered between 10pc and 20pc more than earlier this year.

The firm said that rock bottom interest rates were partially behind the tempting deals.

This is because as interest rates fall, the amount that pension firms must pay out to savers rises.

In addition, offering final salary pensions, which pay a guaranteed amount to savers, is cripplingly expensive for employers.

As a result, many firms are desperate to cut the future cost of their schemes by tempting workers with juicy lump sums.

But experts warned that savers should take care before giving up a lucrative retirement income.

Final salary pensions pay out far more generous amounts than it is normally possible to achieve by investing your cash.

Jon Greer, pension expert at Old Mutual says: ‘Nobody should enter into a final salary transfer without being fully aware of the risks. It is vital to make a rounded assessment of the pros and cons in the context of your overall financial circumstances.’