Free Final Salary Pension Advice
Do you have a final salary pension also known as a defined benefit pension? It’s estimated that there’s a £410Bn shortfall in UK final salary schemes, so you may be thinking about transferring out of your final salary scheme.
You can’t take your 25% tax free allowance in a final salary pension but you can in a private pension. If you would like to access your 25% tax free money then you would have to transfer your pension. However, it’s not always the best advice and should be discussed with a qualified pension advisor who can explain the positives and negatives of transferring out of your defined benefit pension.
What is a Final Salary Pension?
Scottish Pension Advice can help you understand final salary pensions.
A final salary pension is an occupational pension with defined benefits based on your level of service and contributions. If the pension scheme is underfunded and the employer isn’t able to meet the shortfall then the benefits would have to be reduced. For this reason the final salary pension doesn’t offer guaranteed benefits.
Why Do People Want To Transfer Their Final Salary Pension?
There are many reasons why people want to transfer their final salary / defined benefit pension, but it’s essential that the advice you receive is correct for your situation. Once you transfer a final salary pension you cannot switch back.
Some of the most common reasons for people transferring out of a final salary pension include:
- They want to be able to pass the pension onto family when the time comes,
- Poor health and the money would be better used now rather than over a sustained period,
- The tax free 25% can be used now
- The performance of the final salary scheme is a concern.
- You have more flexibility with the money and more control over how much you take.
Final Salary Pension Advice
If you would like to receive advice on your final salary / defined benefit pension then please get in touch. Pension advisors can explain whether they believe it’s in your best interests to transfer your pension and support you by answering any questions you have. If you decide you want to transfer your pension then your pension advisor can assist if you wish.