Do I need advice?
Defined Benefit Pensions
Defined Benefit Pensions
Transferring away from your defined benefit pension is a big, irreversible decision and so should not be taken lightly. You are looking at giving up your ‘gold plated’ guaranteed for life income. You must consider whether you are prepared to exchange this safe guaranteed income for a lump sum to try and provide your income for retirement.
If you have a Cash Equivalent transfer value of more than £30,000 you are required to seek independent financial advice before deciding whether to proceed with a transfer. This advice must be provided by, or at least checked by, a specially qualified pensions transfer specialist.
Here at Strategic Solutions we have a three steps process when reviewing your defined benefit options.
If you meet all the following criteria, we can give you DB transfer advice:
At least 50-years-old
Under 50-years-old if your life expectancy is severely limited
You are resident in the UK
We will not arrange a transfer for you if we recommend that you should remain in your scheme.
Step 1 - ‘Triage’
This step is for you to determine whether you need to seek financial advice or not, If you have a Final Salary scheme pension / Defined Benefit pension please take the time to look at our video below, the FCA’s guidance video on a defined benefit transfer and our educational document before deciding whether you feel you need to take financial advice.
Step 2 - ‘Abridged Advice’
This step is focused on you and what you are trying to achieve in retirement. This will be based on your current assets but won’t provide an in-depth analysis on your current defined benefit pension. At the end of this step we will provide you with a report saying either it is in your interest to retain your defined benefit pension, or that it is unclear whether you would be better off retaining your defined benefit pension. The cost for step 2 is a non-refundable fee of £1,500.
Step 3 – ‘Full advice’
If after step 2 the outcome is ‘unclear’ you can opt to proceed to step 3, we will provide you with a full written recommendation as to whether we think you should retain or transfer your benefits. We will perform an in-depth analysis on your current defined benefit pension and provide you with detailed cashflow forecasting. If you proceed to step 3 you will pay for advice whether the outcome is to retain your pension or to transfer your pension. The cost for step 3 is 2.50% of the transfer value plus £500, capped at £15,500 with a minimum fee of £3,000.