Final Salary Pensions Transfer – Making An Informed Choice



Posted on: 16th November 2017

Financial Advisors are still discussing the merits of Final Salary Pension Transfers. The debate is rolling on about which way is best for clients to go, to transfer out, or to stick. The best option for clients, is that that they should be aware of all their options, and that, in the oldest adage in the advisor’s book of quotes, it all depends on the circumstances. 

Final Salary Pensions – Should I stay or Should I Go?

The debate around transfers out of defined benefit (DB) pension schemes is still being played out. There are plenty of advisors who are passionately against the idea. There are also an equally vocal number who are passionately in favour.

Our view has always been that there is room for both options. The decision is always the clients, but the client can’t make an informed decision unless they know all the facts at their disposal.

Pensions Transfers are more acceptable

The truth is, that up until recent years, no advisor would touch a final salary pension, let alone attempt to transfer it. Since the pension freedoms of 2015 that has changed. Transfers are acceptable, and in some cases highly advisable. Even the regulator has given up its previous stance of assuming that all defined benefit pension transfers are always a bad idea.

However, there is still a level of nervousness within the regulator. Recently there has been a number of reports suggesting shortcomings in the quality of advisory work in this field. Other actions, such as agreeing voluntary cessations of advisory transfer permissions with a number of prominent firms, also suggests that there is still an element of nervousness about final salary pension transfers.

It is understandable. Plenty of financial advisors have not covered themselves in glory in the past – witness the pension mis-selling debacle of the late nineties and early noughties.

But there are some important differences between then and now, and the origins for this current demand for pension transfers tells it’s own tale.

By the people, for the people …

The demand to transfer out of final salary pension schemes is not something that has been generated by advisors or the advice community. For the most part, it comes from people who see their employer covenants as weak, and want to have their pension money under their own control – it is, after all, their money!

Having financial control over their own money and assets is a very important factor for people today.

It is this desire that clearly drove the pension freedoms introduced two years ago. April 2015 changed the way we thought about pensions. It is now more important than ever for people to be able to pass their pension onto the next generation, and for their pension to match their actual, known expenditure requirements in retirement.

From the modelling we undertake with our clients at Haven, we know that expenditure requirements are not linear. People generally require more in the early retirement years as they take advantage of good health and do all the things they’ve looked forward to for years.

The linear income provided by a company pensions scheme does not meet real-life requirements.

It’s no wonder then that people are looking to transfer away from such schemes to find new ways of financing their retirement, and that the demand for pension transfers is so high. Add to this the historically high cash equivalent transfer values, and there is very strong case for transferring away from a final salary pension scheme.

Pension Transfers, Are They For Everyone?

Despite all that’s been said, not everyone should be advised to transfer. Individual circumstances, needs and objectives all still matter. Which it’s why it is still important to work closely with a professional who can help make the right choice for every individual.

Anyone considering a final salary pension transfer needs to engage with and understand their choices. Making good choices can only come from making fully informed decisions, and that can only be the case if you are aware of all of your options.


Contact me at to receive the right advice, enabling you to make an informed choice.