Case Study: Is a DB Pension Transfer Worth It as a Single Person? (2026 Guide)

Being single with no dependants changes part of the defined benefit (DB) transfer picture, because a spouse's pension may be of no use to you. It does not make a transfer suitable on its own. The guaranteed, inflation-linked income still has to be replaced from an invested pot, and unused pensions are due to come into inheritance tax from April 2027. In this illustrative example, the likely outcome of regulated advice is to keep the DB pension.

Quick summary

• Illustrative example: "Richard", 61, a widower with no financial dependants
• DB pension: deferred final salary pension, CETV £385,000, paying £17,600 a year from 65
• DC pension: SIPP £112,000 from previous employers
• State Pension: expected to be the full new State Pension from 67 (40 qualifying years)
• Goal: leave as much as possible to his two adult children, with flexible income in retirement
• Likely outcome of regulated advice: a partial transfer might be explored, but keeping the DB pension and making better use of the existing SIPP is the more likely conclusion

When most people think about DB pension transfers, the conversation soon turns to what happens to a spouse's pension if they die first. But what about someone with no spouse, no dependants and adult children they would like to leave something to?

This hypothetical scenario illustrates a genuinely different dynamic in DB transfer analysis. Imagine Richard, 61, a widower from Cheshire, reviewing his retirement options.

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Richard's background

Richard worked in the utilities sector for 28 years before taking voluntary redundancy at 60. His wife died three years ago, and his two adult children, both in their 30s, are financially independent. He has no plans to remarry.

His position at 61:

• Deferred DB pension: £17,600 a year from age 65, the scheme's normal pension age, increasing in line with CPI. The scheme pays no automatic lump sum, although Richard could give up some pension for tax-free cash.
• Cash Equivalent Transfer Value (CETV): £385,000.
• SIPP: £112,000, combined from two earlier DC pensions.
• ISA: £38,000 in cash and stocks and shares.
• State Pension: the full new State Pension from 67 (40 qualifying years). That is £241.30 a week, about £12,548 a year, at 2026/27 rates. You can check your own forecast on gov.uk.
• Home: owned outright, worth about £320,000. He plans to downsize by 70.

Key point: Richard's scheme provides a spouse's pension, like most DB schemes, but as a widower with no plans to remarry there is no one to receive it. On his death, the scheme would pay little or nothing to his children beyond any guarantee period on his pension. That is what makes his situation different.

Why Richard is thinking about a transfer

Richard's main reason for considering a transfer is to leave money to his children. His thinking goes like this:

1. The DB pension effectively dies with him, because no one qualifies for the spouse's pension and there is no automatic lump sum.
2. If he dies before drawing his pension, the scheme may pay only a small death benefit.
3. Under the rules in place until April 2027, unused money in a SIPP can usually pass to nominated beneficiaries outside his estate.
4. His children would inherit whatever is left in the pot.

Important: the 2027 IHT change. Unused pension funds and most pension death benefits are due to come into the scope of inheritance tax from 6 April 2027. That substantially changes the argument for moving a DB pension into a SIPP to pass wealth to children. Whether any tax would actually be due depends on the size of the whole estate, the nil-rate bands available and the final rules. Gov.uk explains how inheritance tax works.

How a regulated adviser would analyse the transfer

To assess whether a transfer could make sense, an adviser with the pension transfer permission would carry out the FCA's required analysis. This includes a transfer value comparator (TVC), which compares the CETV with the estimated cost of buying the same guaranteed income on the open market, and cash-flow modelling based on Richard's own plans.

Many advisers also look at the required rate of return: the investment growth, after charges, the transferred pot would need to achieve consistently for the rest of Richard's life to match the income he would give up.

In this example:

• Income given up: £17,600 a year, increasing with CPI from 65, with no automatic lump sum.
• CETV offered: £385,000.
• Estimated cost of the same income from an annuity at 65: about £490,000 to £510,000, based on a single-life, CPI-linked annuity for a 65-year-old man.
• What the TVC shows: the CETV is worth roughly 75p to 79p for every £1 it would cost to replace the income.
• Estimated required return: 6.8% a year after charges.

Key point: a required return of 6.8% a year means Richard's transferred pot would need to grow at that rate, after all charges, from now until he dies, just to match what the DB scheme already provides. That would need a portfolio taking significant investment risk, with no guarantee of success.

Does having no one to receive a spouse's pension change things?

On Richard's death, whether before or after he starts his pension, his children would receive little from the scheme beyond any short guarantee period on payments.

This does change the balance of the analysis. Part of a DB pension's value lies in its survivor benefits, and for Richard that part is worth very little. But an adviser would still weigh up:

• how much income Richard needs and how reliably a transfer could provide it
• the investment risk he would be taking on
• his health and how long he might live
• the inheritance tax position for pensions from April 2027

Richard is in good health, with no significant conditions. A 61-year-old man in good health can, on average, expect to live into his mid-80s, with a real chance of reaching his 90s. That could mean 20 to 30 years of income to fund reliably from a transferred pot.

Important: even where no one would receive a spouse's pension, a transfer is not automatically suitable. The FCA's starting assumption is that a transfer is unlikely to be suitable for most people. A required return of 6.8% a year is demanding whatever the survivor benefits.

Partial transfers

Some schemes allow a partial transfer, where part of the pension is transferred and the rest is kept as guaranteed income. An adviser might look at this for someone in Richard's position, as it could keep a secure income floor while creating a pot that could pass to his children. Not every scheme offers it, and the same analysis and advice requirements apply to the part being transferred. Our article on partial DB transfers explains more.

The 2027 IHT change and the inheritance argument

Until recently, a single person with adult children had a genuine argument that moving a DB pension into a SIPP made sense for estate planning. The SIPP usually sat outside the estate. On death before 75, it could pass to nominated beneficiaries free of income tax, and on death after 75 the beneficiaries paid income tax at their own rate when they drew it.

From 6 April 2027, unused pension funds and most death benefits are due to be counted for inheritance tax. For Richard, this means:

• money transferred from his DB pension and left unspent in a SIPP would be added to his estate
• his existing estate (home of about £320,000, ISA of £38,000 and SIPP of £112,000) is already around £470,000
• how much, if any, inheritance tax would be due depends on the nil-rate bands available, including any unused allowance transferred from his late wife, and on whether his home passes to his children
• beneficiaries of a pension inherited after he reaches 75 could also face income tax on withdrawals, on top of any inheritance tax

The details are complex, and anyone planning around them should take advice based on the final legislation. The broad point is clear, though: the "leave it to my children" argument at the heart of Richard's case is much weaker than it was.

What about income?

Setting inheritance tax aside, does Richard's income need support a transfer?

He would like about £28,000 to £32,000 a year in retirement. This is how that could look without a transfer:

Projected income without a transfer (illustrative)

Age	Income source	Annual amount
61 to 64	SIPP drawdown (flexible)	£10,000 to £14,000
65 to 66	DB pension starts, plus SIPP top-up	£17,600 + £8,000 = £25,600
67 onwards	DB pension + State Pension (+ SIPP if needed)	£17,600 + £12,548 = £30,148 guaranteed

From 67, Richard would have about £30,150 a year of guaranteed, inflation-linked income without touching his SIPP. That leaves the SIPP as a flexible reserve for large expenses, gifts to his children or care costs.

Likely outcome of regulated advice

After a full analysis and suitability assessment, the likely outcome of regulated advice in a case like Richard's would be to keep the DB pension. The main reasons an adviser would typically give:

1. A required return of 6.8% a year is very demanding, needing sustained strong performance over 20 years or more.
2. Income security. Richard's core income need from 65 is met by the DB pension.
3. The 2027 IHT change undermines the inheritance argument. A transfer could increase the value of his estate for inheritance tax rather than reduce it.
4. Longevity. In good health at 61, a guaranteed income of £17,600 a year, protected against inflation for potentially 25 years or more, is very valuable.
5. He already has flexibility. Richard's £112,000 SIPP can be drawn flexibly, so he doesn't need a second flexible pot.

Key point: having no one to receive a spouse's pension is relevant but not decisive. It reduces one of the reasons to keep the DB pension, but it doesn't outweigh the investment risk, longevity risk and inheritance tax points that all point towards keeping it.

Other points an adviser might raise

Even where keeping the DB pension is the likely outcome, a review like this can bring other useful actions to light:

1. Update the expression of wishes on the SIPP, naming both children in the proportions Richard wants.
2. Think about the order in which savings are used. From April 2027 the SIPP and the ISA are both likely to count towards his estate, so the order he draws them in becomes mainly a question of income tax and flexibility. An adviser can model this.
3. Review estate planning ahead of April 2027. With his home, SIPP and ISA, a specialist estate planning review makes sense. His DB pension, which stops on his death, would not add to his estate in the same way.
4. Review his will and lasting power of attorney. Richard's will was written before his wife died and needs updating.
5. Check the scheme's death benefits. Some schemes pay a guarantee on the pension for five years once it starts, or a refund of contributions on early death. It's worth confirming exactly what applies.

Seven things single people should know about DB pension transfers

1. No spouse means a different analysis, not an automatic case for transferring. It changes the survivor benefit trade-off but doesn't make a transfer suitable on its own.
2. The required return still matters. It has to be achieved over a long retirement, which is a high bar even for experienced investors.
3. The 2027 IHT change matters a great deal here. If passing wealth to children is your main reason for considering a transfer, the new rules change the maths. Any advice should take them into account.
4. Longevity risk is real. A healthy 61-year-old may live to 90 or beyond. Guaranteed income that keeps pace with inflation for 25 years or more is hard to replicate from an investment pot.
5. Your existing DC savings may give you enough flexibility. If you already have a SIPP or other DC pensions, you may not need to take on the risk of transferring a DB pension too.
6. Check your scheme's death benefits carefully. Some schemes offer a refund of contributions, a guarantee period or a dependant's pension for someone other than a spouse. Read the scheme rules.
7. Keep your expression of wishes up to date. Whether you transfer or not, make sure each pension scheme knows who you would like to receive any death benefits. Your will doesn't usually cover this.

Getting regulated advice and help

Richard's example shows that DB transfer decisions are genuinely complex, and the answer is rarely obvious even when circumstances seem to favour a transfer at first glance. If your safeguarded benefits are worth more than £30,000, the law requires you to take advice from an FCA-authorised adviser with the pension transfer permission before you can transfer. The FCA's starting assumption is that a transfer is unlikely to be suitable for most people.

A good adviser doesn't just run the numbers. They look at your whole picture: income needs, health, family, estate planning goals and how they all interact with the DB pension.

Free, impartial guidance is available from MoneyHelper, and if you're 50 or over you can book a Pension Wise appointment about your DC pensions. If anyone contacts you out of the blue about your pension, check the FCA's ScamSmart pages before doing anything.

I don't give pension transfer advice. If it would help, you can book a free, no-obligation chat about how DB transfers and the advice process work. It's general information, not advice. If you then want regulated advice, I can introduce you to an FCA-authorised firm that holds the pension transfer permission. Arthur Browns may receive a fee from the firm we introduce you to if you become their client. Introductions are for UK residents with a transfer value of £50,000 or more.

Frequently asked questions

Can a single person with no dependants transfer their DB pension to a SIPP?

Yes, it is possible, but if your safeguarded benefits are worth more than £30,000 you must take regulated advice from an adviser with the pension transfer permission first, whatever your circumstances. Having no spouse or dependants changes part of the analysis, particularly around survivor benefits, but it doesn't make a transfer suitable on its own. The required return, investment risk and the risk of living longer than expected all still matter.

Does having no one to receive a spouse's pension make a transfer more likely to be suitable?

It can be a factor, because it removes one of the reasons a DB pension is valuable. But the FCA's starting assumption is still that a transfer is unlikely to be suitable for most people. The guaranteed, inflation-linked income and protection against living longer than expected remain strong reasons to keep a DB pension in many cases.

Will the 2027 pension IHT changes affect single people who want to leave money to their children?

Yes. Unused pension funds and most pension death benefits are due to come into the scope of inheritance tax from 6 April 2027. That substantially weakens the estate planning argument for moving a DB pension into a SIPP. Whether tax would actually be due depends on your whole estate and the allowances available, so anyone considering a transfer for inheritance reasons should take advice based on the final rules.

What death benefits does a DB pension offer a single person with no dependants?

It depends on the scheme. Most DB schemes provide a spouse's or dependant's pension, which may be of no use if you have none. Some schemes refund contributions if you die before drawing your pension, or guarantee payments for a period (often five years) once your pension has started. Some pay a lump sum if you die before your normal pension age. Check your scheme rules, because the benefits for a single person can be limited.

What is an expression of wishes and why does it matter?

An expression of wishes (sometimes called a nomination of beneficiaries) is a form you give your pension scheme saying who you would like to receive any death benefits. Pension death benefits are usually paid at the discretion of the scheme trustees rather than under your will, so the form is the best way to guide them. Review it regularly, especially after bereavement, divorce or another major change.

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This is an illustrative example. Richard is hypothetical, and all figures are examples only, based on assumptions that may not apply to you. Nothing in this article is advice or a recommendation to transfer or keep any pension. Please read our important information.