Questions and answers

Defined benefit pensions

What is a defined benefit pension?

A defined benefit (DB) pension, often called a final salary or career average pension, pays you a guaranteed income for life. The amount depends on your salary and how long you were a member, not on how investments perform. It usually increases each year and often includes a pension for your spouse or civil partner. Read our guide to final salary pensions.

Can I transfer my final salary pension?

Often, yes, if you haven't started taking it. Most private-sector schemes and the Local Government Pension Scheme let you ask for a transfer value and move it into a defined contribution pension, such as a personal pension or SIPP. Once a DB pension is being paid, it normally can't be transferred. A transfer means giving up your guaranteed income for life, and it cannot usually be reversed. See how defined benefit pension transfers work.

Transfer values

What is a cash equivalent transfer value (CETV)?

It is the cash sum your scheme will pay to another pension if you give up your DB benefits. You can usually ask for one if you haven't started taking your pension, and most schemes give you one free statement every 12 months. The figure is guaranteed for three months from its guarantee date. Read more about the transfer value of a pension.

Why has my transfer value changed?

Transfer values move over time, mainly with interest rates and gilt yields. When yields rise, transfer values usually fall, and when yields fall, they usually rise. Your age, your scheme's funding and its assumptions also play a part. A higher figure than you expected is not, on its own, a reason to transfer.

Advice and the rules

Do I have to take advice before transferring?

If your safeguarded benefits are worth more than £30,000, yes. The law requires you to take advice from an FCA-authorised firm with the pension transfer permission before you can transfer, and your scheme will check that you have. Safeguarded benefits include DB pensions and guarantees such as guaranteed annuity rates.

What is the FCA's view on DB transfers?

The FCA starts from the position that a transfer is unlikely to be suitable for most people. Advisers must assume a transfer won't be suitable unless they can clearly show it is in your best interests. For most people, keeping a DB pension is the better option. The FCA explains more on its page about defined benefit pension transfers.

How much does transfer advice cost?

Each firm sets its own charges, and it must explain them in writing before you agree to go ahead. Since 1 October 2020, firms advising on DB transfers must generally charge the same whether or not you transfer. This is the ban on contingent charging, with limited exceptions for people in serious ill health or serious financial hardship.

Public-sector pensions and who we can help

Can I transfer my NHS, Teachers', Police or Civil Service pension?

Not to a defined contribution pension. Since April 2015, members of unfunded public-sector schemes, including the NHS, Teachers', Police, Firefighters', Civil Service and Armed Forces schemes, can't transfer to a personal pension, SIPP or drawdown plan. This means we can't help with a transfer from these schemes. The Local Government Pension Scheme is funded, so its members usually can transfer. See public-sector pensions.

Is there a minimum transfer value?

To arrange an introduction to an FCA-authorised firm, your transfer value needs to be £50,000 or more. If it is below that, we're not able to arrange an introduction, and MoneyHelper offers free, impartial guidance. We can only help people who live in the UK.

Our free chat

What is the free chat, and what isn't it?

It's a free, no-obligation 15-minute chat with Phillip Handley, a Chartered Financial Adviser. He explains in general terms how DB pensions, transfer values and the advice process work, so you know what to expect. It is not advice. We do not give defined benefit pension transfer advice, and we won't tell you whether a transfer is right for you. See how it works.

How do you get paid?

The chat is free. If you want regulated advice, we 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. The firm will explain its own charges in writing before you agree to anything. You don't have to use the firm we introduce you to, and you can check any firm on the FCA Register.

Guaranteed annuity rates

Can you advise on a pension with a guaranteed annuity rate?

Yes. Guaranteed annuity rates (GARs) are the exception to what we do. Phil can advise directly on pensions with guaranteed annuity rates through Arthur Browns, subject to suitability. Advice is chargeable, and we will explain our charges in writing before you agree to go ahead. Read about guaranteed annuity rates.

Complaints, scams and free help

How do I make a complaint?

Please contact us first so we can put things right: email info@arthurbrowns.co.uk, call 0113 403 8425, or write to Arthur Browns Wealth Management Ltd, Titan House, 13 Station Road, Horsforth, Leeds LS18 5PA. If we can't resolve it, you may be able to refer it to the Financial Ombudsman Service. A complaint about advice from a firm we introduced you to should go to that firm first. See Important information.

How can I spot a pension scam?

Be wary of cold calls, texts or emails about your pension, offers of a "free pension review", promises of high or guaranteed returns, pressure to act quickly, and offers to release cash before age 55 (rising to 57 from 6 April 2028). Check the FCA's ScamSmart site and the FCA Register before dealing with any firm. Read more about pension scams.

Where can I get free, impartial guidance?

MoneyHelper is the government-backed service offering free, impartial help with pensions. Pension Wise, part of MoneyHelper, offers free guidance on your pension options from age 50. You don't have to use us.

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Important: Arthur Browns Wealth Management Ltd (FCA 825843) does not give defined benefit pension transfer advice. The FCA starts from the position that a transfer is unlikely to be suitable for most people, and a transfer cannot usually be reversed. See Important information.