Final salary pension transfers

Based in Boston Spa, Yorkshire, we offer final salary (defined benefit) pension transfer advice to clients across the UK, with no face-to-face meeting required. We do not charge a fee if we do not recommend a transfer.

Please note that we are currently only advising on defined benefit pension transfer values worth more than £150,000.

We pride ourselves in giving an objective, unbiased assesment of whether a transfer in your interests, and frequently recommend that clients do not transfer out of their pensions. Where we do recommend a transfer we first ensure that clients are fully aware of all the potential risks and disadvantages involved.

Our DB transfer advice charge

If we do not recommend a transfer in your case then no fee is payable, and you would be free to seek a second opinion from another IFA.

If we do recommend that you transfer our of your defined benefit pension then our full transfer advice fee, deducted from the transfer value as it moves to the new personal pension, is as follows:

  • £3,950 for transfer values below £300,000
  • £4,450 for transfer values between £300,000 and £500,000
  • £4,950 for transfer values above £500,000

This covers the work involved in the transfer as well as the very significant compliance, regulatory and liability costs involved in advising on defined benefit transfers.

Please note that the above fees apply to a transfer into an "income drawdown" pension. Additional fees apply for the purchase of a lifetime annuity - please ask for details.

Ongoing charges

We will provide expert advice on how to invest your transfer value, in order to meet your financial goals while taking an appropriate level of risk. If you choose our ongoing advice service then the total annual cost of your new pension, including the provider charge, fund management charges, and our ongoing advice charge, will typically be between 0.5% and 1% of assets per year, which is highly competitive by industry standards (the total cost of a SIPP with Hargreaves Lansdown, including their provider charge and the cost of a typical "active" investment fund, can be as much as 2% per year, or even more).

We can only provide advice on a DB transfer if we are also going to be providing you with ongoing investment advice for at least the first year after the transfer. This is because we want to be sure that the investments you choose will be suitable for your circumstances and appetite for investment risk. We would therefore set up a new personal pension (SIPP), with a mainstream provider such as Aviva or AJ Bell, to receive the transfer proceeds.

Our process

Stage 1: Initial assessment (no fee)
This involves a short phone call (or email exchange) to help us understand your personal and financial circumstances, the pensions that you have, and the reasons that you want to transfer out of your defined benefit pension. This allows us to quickly reach a decision on whether we are going to be able to offer you advice on your transfer or not.

If we decide that we aren't able to offer advice on your particular situation then we will explain why, and, if you wish, provide details of other firms of advisers so you can get a second opinion.

Stage 2: Advice on your transfer (no fee if we do not recommend a transfer)

If we feel that we may be able to recommend a transfer then we will carry out a detailed initial analysis of the transfer value being offered, the attributes of your pension scheme, and your circumstances. We will carefully consider whether or not a transfer is in your interests, and if there are better ways of achieving your financial goals.

If, having done this, we advise you NOT to transfer then we will provide a short report giving the reasons for this, and will not charge a fee. We will not be able to sign any "advice confirmation" forms from your pension scheme in this situation.

If we advise that you DO transfer then we will offer you the option of proceeding with the transfer.

Stage 3: Full transfer analysis with recommendation report (fee as specified at the top of this page)

We will supply the following:

  • A full recommendation report explaining why we are recommending a transfer.
  • An illustration from our recommended pension provider, showing all costs involved.
  • A full Transfer Value Analysis report (if appropriate) generated using industry-standard software.
  • The cost of securing an equivalent guaranteed income via an annuity (if appropriate)
  • A cashflow forecast model to show how a transfer out could affect your household finances in various scenarios, over the rest of your life.
  • Discussion of how a transfer could meet your objectives, and what other approaches might meet those objectives in a cheaper and less risky way.
  • A comparison of death benefits under the current scheme and if you transfer out.
  • A full list of the pros and cons of a transfer in your particular case.
  • Details of the pension provider that we recommend the transfer value is moved to
  • Details of the portfolio of investment funds that we recommend the transfer value is invested in once it arrives with the new provider

If having read all that you still want to proceed, and we are happy that you understand the risks involved, and that a transfer is still suitable for your situation, then we proceed to the transfer itself.

Stage 4: Ongoing advice on the investments within the new pension

Once the transfer is complete we provide ongoing advice on the investments held, including when to make changes to the funds you hold as market conditions and your circumstances and risk appetite change, as well as advice on how to withdraw money in the most tax efficient way when you reach retirement age. We will write to you regularly with performance reports, market updates, and investment advice, and will provide you with as much ad-hoc advice as you want. We will take care of all the administration of the new pension, although we will always get your permission before carrying out any dealing.

Why consider a transfer?

A final salary (or "defined benefit") pension is one of the most secure and attractive forms of pension. Your income is guaranteed for life, with inflation protection, and an income for your spouse. Few "money purchase" pensions, whether occupational or personal, can match these benefits, regardless of whether income is taken via a lifetime annuity or income drawdown. Also, money transferred into a personal pension will be liable to the ups and downs of the financial markets, which members of final salary pension schemes don't have to worry about.

However, there are circumstances where transferring out of a final salary pension can make sense. For example:

  • Because money in a personal pension all passes to your beneficiaries (tax free if you die before age 75), while a final salary pension can cease altogether when you die, the death benefits of a personal pension can be much greater than a final salary pension. As such if you believe you have a reduced life expectancy then transferring out to a personal pension can make sense.
  • Personal pensions allow you to take as much income from your pension fund as you like, when you like. This compares favourably to final salary pensions which are completely inflexible. As long as you have significant other assets or pension income to act as a safeguard you may decide that the flexilibity of a personal pension is more attractive to you than the guarantees offered by a defined benefit pension.
  • If a previous employer, with whom you have a final salary pension, becomes insolvent then your pension may be taken over by the Pension Protection Fund (PPF). This offers some protection but your income level and inflation protection may be cut.
  • If you are single then the spouse's income offered by a final salary pension scheme may be of no use to you, which could make securing a pension income via a flexible personal pension more attractive.
  • If you have more than one final salary pension then transferring one out and keeping the other can provide the optimal mix of security and flexibility.
  • If you have a relatively high appetite for investment risk then a personal pension may deliver a better income in retirement than a final salary pension.
  • If you are retiring now, or are about to, then it is always worth considering a transfer just so you check all your options.

Whatever your reasons, if your transfer value is greater than £30,000 then you will have to get a qualified IFA to provide advice and certify to your pension scheme that they have done so.

To discuss our service please get in touch

For our main pension advice page please click here, or to read customer testimonials click here.

Related news articles:

Why a pension transfer won't necessarily help you to retire early

Client story - multiple defined benefit transfers into one SIPP

Final salary pension advice, Boston Spa IFA

Chartered Financial Planners. FCA Regulated (FCA no. 603653). Free initial assesment.