Up until ‘pension freedoms’ it was pretty much unheard of to transfer a defined benefit pension (otherwise known as a final salary pension).
They were considered gold plated pensions. A guaranteed income for life at a level that could never be matched by modern day defined contribution pensions.
But when the then Chancellor George Osborne announced pension freedoms in 2014 it changed the game. It allowed people to flexibly access their defined contribution pensions meaning they could take from their pension pot what they wanted, when they wanted from age 55. Defined benefit pensions do not allow this same flexibility.
During the same period, interest rates have been very low meaning transfer values offered (in exchange for giving up your guaranteed income) on defined benefit pensions have been historically high from a pure monetary value point of view.
There can be clear reasons why you may want to transfer a defined benefit pension, however the system is now turning against you. Here’s why and what you can do about it.… Continue Reading