Why A Final Salary Defined Benefit Transfer Could Be Best Now

Why A Final Salary Defined Benefit Transfer Could Be Best Now

For Your No-Cost Final Salary Defined Benefit Pension Review, Please Complete The Form Below

If you have a preserved final salary pension, discover why NOW may be the best time ever to consider a final salary transfer

A Few Of The Many People Who've Reviewed Their Final Salary Pensions

final salary transfer

"Really Good Service"
Jo Seawright
Business Coach

I was introduced to the pension transfer specialist by SIPPclub.  At first I was a little worried that the adviser’s firm was a scam as I had only come across them online initially.  But I got on the phone to Steve, and we talked through the technicalities of what I wanted to do with my pension, and Steve came across as both professional and helpful.  He and his team got the entire transfer complete with relatively little pain other than having to wait on the 'other end' completing their paper work.  I was kept posted all the way through, they told me what any delays were and when I could help by putting a little pressure on the other party involved.  All in all a really good service was extended from start to finish from every member of the team.  If you are looking to move your pension to a self-managed SIPP I would definitely recommend you contact SIPPclub for an introduction to Steve.
final salary transfer

"Correct Decision"
Allan Holt
Advised Not To Transfer

Good morning Gary (pension transfer specialist)
I would like to thank you very much for your considerable time and impartial comments yesterday which helped me to come to my decision of taking the Jaguar DB pension rather than transferring out of the pension scheme.  It was, as you agreed, a close and difficult decision but finally 12+ months of investigations and research (and worry) on my part can now be concluded.  As I mentioned to you, I had already spoken with a number of IFAs prior to our meeting over the past 12 months who, I'm pleased to say, were all helpful, but I would like you to know that it was your knowledge of the Jaguar/Landrover process and of dealing with the transferred funds, versus retaining the DB pension, in view of my circumstances, that enabled me to have the confidence I was making the correct decision.

Dear Brian (SIPPclub)
Am I glad that I contacted SIPPclub last year!!  As you will see from the above, Gary was able to help me come to a decision of which I am already feeling the benefit.  There's something within me that yearned to take the transfer of my funds, but all things considered, I can see that it was not the best option in the end.  I shall remember SIPPclub and (along with Gary's details) make mention of it when discussing pensions, or indeed any investments with my colleagues from JLR.  Thank you for your part in assisting me to satisfactory outcome.

final salary transfer

"Excellent Service, Attractive Fee"
Dr Steven Fawkes

Having looked at transferring my final salary pension, I was close to giving up when I discovered SIPPclub.  The service provided by Brian was excellent and the service provider who took care of the transaction carried out the work efficiently and on an accelerated timescale to meet a deadline.  The fee they charged was considerably less than quotes I had originally received.

"Nothing Short Of Brilliant"
Shaun Palfrey

For over a year now, I have wanted to transfer, or at least look at transferring a defined benefit final salary pension from an old employer into my SIPP, and after searching high and low for a firm that would give the advice I was looking for without it costing me a fortune, I found it was almost impossible.  The biggest issue being that many wanted the full amount of their fees paid regardless or whether the advice they gave was positive or negative regarding the recommendation, a potentially very expensive game indeed.  Almost as a last resort, I contacted SIPPclub who immediately put me in touch with a firm that were nothing short of brilliant. The whole process took a matter of a few weeks and was smooth and seamless throughout.  Now I may have been fortunate as the timescale isn't only in the hands of the IFA but in the ceding administrators.  However, in my case, to say the IFA was proactive on all counts is an understatement.  If you are thinking of transferring a defined benefit final salary scheme, then I can only recommend that you contact SIPPclub in the first instance.  It's as simple as that.

"Professionalism, Experience and Integrity"
Matt Land

Having received a final salary pension transfer offer from my former employer, I sought financial advice and was initially put off from exploring my options with local advisors due to their high fees and "one size fits all" mentality.  I found SIPPclub online.  SIPPclub was very helpful in putting me in touch with a pension transfer specialist firm who carefully analysed my specific case.  They explained my options clearly and for a very reasonable pre-agreed price.  Based on their detailed analysis, I decided to go ahead with the transfer and they made what could have been a frustrating and stressful experience relatively quick and easy.  I recently read newspaper articles commenting on how difficult it is to transfer out of a final salary scheme despite the new pension freedom legislation and would agree with this as I initially found the process extremely daunting.  I would recommend SIPPclub to anybody considering a pension transfer as with their professionalism, experience and integrity, the advisors appointed put my mind at ease and delivered an outcome I am very happy with.

"The Service Provided Was Excellent"
Jon A

I used SIPPclub to assist me with the transfer of my defined benefits pension from Lloyds to an AJ Bell SIPP.  Having been introduced by SIPPclub to a pension transfer specialist firm, throughout the process, the service provided was excellent.  This was both in terms of high level advice and help in the unavoidable paper work and liaison that such a transfer produces.  The whole process took less than 4 weeks to complete and was done completely on line in combination with two short phone discussions.  The fees I was charged were excellent value for money and very competitive in comparison with similar providers.  I would whole heartedly recommend SIPPclub to anybody thinking about transferring their final salary pension in this way.

"Miles Ahead Of Everyone Else"
Frank Martin

Your organisation is the only one capable of doing things correctly first time.  My existing SIPP provider has just confirmed that their systems are inadequate with both my transfers still awaiting their paperwork.  I’m provided with a different excuse from my former employer every time I contact them.  What an industry – you are miles ahead of everyone else!  Very many thanks.

Do You Need To Transfer Your Final Salary Defined Benefit Pension?

1. Do you have a spouse or partner eligible to inherit part of your defined benefit pension?

If you have no spouse or partner eligible for payouts from a final salary defined benefit pension, the scheme will still include these potential benefits when calculating your transfer value.  If you do have a spouse or partner, and decide to transfer out and invest your fund, they could inherit and have to manage your portfolio if you died, rather than receiving a guaranteed income for life, so it is important to consult them on their wishes.

Answer Yes: you're not affected either way
Answer No: you're better off transferring

2. Do you have any medical conditions that may significantly shorten your life expectancy?

If you don't expect to live long, a guaranteed income for life from your final salary defined benefit pension will be of less value to you, although it might be important to your spouse or partner if you have one.  If you transfer, any money left in your pot can be passed on to loved ones.

Answer Yes: you're better off transferring
Answer No: you're not affected either way

3. Do you have more than enough secure regular income to cover your regular outgoings in retirement?

If you already have enough guaranteed Income from other sources, transferring out and investing your final salary defined benefit pension in the stock markets will be a less significant risk than if it world be your only income.

Answer Yes: you're better off transferring
Answer No: you're better off leaving it

4. Are you comfortable investing in the stock market?

If you transfer out of a final salary defined benefit pension, you will have to invest your retirement savings in the financial markets, which involves the risk of losing money as well as growing your fund, plus understanding and keeping on top of your investments, or paying for advice, throughout your old age.

Answer Yes: you're better off transferring
Answer No: you're better off leaving it

5. If you transfer out, are you likely to want to seek a guaranteed income for life later on by buying an annuity?

If you give up the guaranteed income from a final salary defined benefit pension, there's a high chance it will leave you out of pocket if you later use your pension fund to buy another guaranteed income product in the form of an annuity.

Answer Yes: you're better off leaving it
Answer No: you're not affected either way

6. Are you particularly attracted to varying your pension income to meet changing needs over time?

If you transfer out, you would have the flexibility of taking different sums out of your fund as income each year, if this is something that appeals to suit your changing needs or to minimise your income tax bill.

Answer Yes: you're better off transferring
Answer No: you're not affected either way

7. Are you particularly keen to pass on a significant part of your pension to your family on your death, rather than using it up during your lifetime?

If you transfer out, you will be able to bequeath whatever is left over in your pension fund to whichever loved ones you prefer when you die, whereas a final salary defined benefit pension typically continues paying out only to an eligible surviving spouse or partner.

Answer Yes: you're better off transferring
Answer No: you're not affected either way

Source: Aegon

With some of the highest final salary defined benefit transfer values ever seen, we're delighted to present an article explaining why you should review your final salary pension now, even if you looked at it six months ago!

If you were asked to list your most valuable assets in descending order, how far down would the small, deferred, annual pension from your previous employer be?

Steve Petrie, Chartered Financial Planner

The Surprising Value Of A Final Salary Pension

The reality is a final salary pension is likely to be your second most valuable asset and for a significant number, it will be more valuable than your family home, sometimes by a considerable margin.

New pension freedom rules, which give you far greater flexibility over what you can do with your pension pot came into force on 6 April 2015 and this has led to a greater interest in what could be lying beneath the annual benefit statement that has typically been received and filed with apathy.

The answer will be revealed to you upon request of a Cash Equivalent Transfer Value (CETV) from your pension trustees.

The CETV is the cash sum the trustees are willing to transfer to a personal arrangement in your name in exchange for you giving up your pension rights with them.

How Much Could Your Final Salary Transfer Be Worth?

What we have been seeing is that all transfer values are not created equally.  Generally speaking, the bigger your employer, the more generous your transfer value is likely to be. Large financial companies, banks, insurance companies and FTSE 100 members tend to offer the best transfer values.

One 54-year-old former employee of a large investment bank, who had a deferred pension of £4,500 per annum, was surprised to learn his CETV was in excess of £190,000.

A few years ago it would not have been as much, so why are we seeing such sizeable offers at the moment? The answer is down to the assumptions the trustees are using compared to what they have been historically. The three variables contributing to a CETV are inflation, annuity rates and investment returns.

In order to calculate a CETV, the trustees revalue the pension from date of leaving, to date of retirement, using inflation assumptions. They then capitalise the income using interest rates assumptions, and finally discount this back to the present day using investment return assumptions.

Indexation assumptions are restricted due to maximums and minimums legally bestowed on trustees, therefore lower assumed investment returns and annuity rates are driving these sizeable CETV values.  An increase in these assumptions results in falling transfer values.  The graph below shows average transfer values since 2016.

final salary defined benefit

Should You Consider A Final Salary Transfer?

There are many reasons to consider transferring a final salary pension.  However, the starting point as pointed out by the FCA, is the default position should be to remain in the scheme.

The reality however, is that for certain people there are many good reasons why it will make sense to transfer. Even the Government, in its response to the Freedom And Choice In Pensions Consultation, noted:

... it is likely that some individuals will request transfers out of their defined benefit pensions, and for some individuals, this may be in their best interests. For example:

  • if they are heavily in debt
  • if they have a short life expectancy
  • if they are unmarried and do not have dependants
  • if they would prefer wealth to an income stream

You can read the full final salary consultation here.

I would add to the above:

  • if you want to pass on the value of your pension to your spouse or children
  • if you would like the opportunity for a larger tax free lump sum at retirement
  • if you have other sources of capital and income
  • if you are concerned over the stability of your ex-employer
  • if you want personal investment control and flexibility
  • if you are married and your spouse has equally good pension rights

Pension members are thankfully protected.  The DWP has ensured no pension provider will accept a transfer from a final salary scheme where the member has not received advice from a suitably qualified Pension Transfer Specialist, and it is certainly not suitable for most.

We would always recommend that you seek independent financial advice before you take any action with your final salary pension scheme as any action taken is usually irrevocable and there are valuable benefits that would be lost on transfer.

What You Should Do About Your Final Salary Pension

If you haven't obtained a final salary transfer figure within the last six months, given the fact that final salary transfer values are currently running so high, it may be prudent to ask your trustees now, even if you are likely to fall into the "unsuitable category". 

But don't leave it too long.  As interest rates were increased in August 2018 and further rises are predicted, your final salary transfer value could be slashed.  And that could mean you miss out on tens of thousands of pounds of extra money.

There is no requirement to do anything once you receive your final salary transfer figure, and usually trustees will provide one CETV per annum at no cost to you.  And the benefit of doing this...

You Will Know For Sure Where To Place Your Family Home On Your Asset List!


Final Salary Defined Benefit Transfer Review Service

If you'd like your final salary pension reviewed, we offer our Members a two stage service designed to minimise your costs.  It's provided by a Financial Conduct Authority regulated firm of independent financial advisers that over the last 25 years has advised around 100,000 pension clients nearing or in retirement.  It has experience of both SIPP and SSAS.

Stage One - Initial Analysis (No-Cost Final Salary Review)

On completing the form below, you'll either attach your CETV or you'll email it to us shortly afterwards.  When we receive it, we'll introduce you to the pension transfer specialist, and include a link to the firm's website.  We'll also forward a copy of your information to them.

A cashflow report will be produced showing how long your fund value might last, assuming a range of growth rates.  Also produced will be a specific calculation showing the growth rate required within your new pension scheme to match the benefits you’ll be giving up by transferring your final salary pension.

Once the figures have been calculated, you'll speak with the adviser to explain what you’re hoping to achieve by transferring your final salary pension.  The adviser will assess whether it’s likely to be appropriate, particularly if you’re intending to make your own investment decisions.

If the adviser is willing to recommend the transfer, and you'll like to proceed, you'll proceed to Stage Two below.

If the adviser is unwilling to recommend the transfer, you won’t be offered Stage Two, and you won't receive the report and calculation.  You will not be charged for this service.

If the adviser is willing to recommend the transfer, but you decide not to proceed, leaving your final salary pension with your former employer, you won't receive the report and calculation.  You will not be charged for this service.

If you have exceptional circumstances, for example a pension transfer in connection with a divorce, there may be a charge which will be discussed and agreed with you beforehand.

Stage Two - Suitability Report And Certificate Recommending The Transfer

You’ll complete a detailed factfind, which will formally confirm the information you’ll have discussed with the adviser in Stage One.  You will also be asked to complete a Client Agreement, confirming that you’ll pay the adviser’s fee.

When the adviser receives your completed documents, a Suitability Report will be produced together with a positive Certificate of Recommendation that you can present to the pension provider of your choice.  Currently, almost all pension providers will only accept a transfer of a final salary pension on receipt of a positive recommendation from a suitably qualified Pension Transfer Specialist.

Should you wish to transfer your final salary pension to a SIPP or SSAS in order to make your own investment decisions, the adviser will offer comments on your investment choices.  If you'd like the adviser to make on-going investment recommendations, you'll be charged a typical yearly rate of 0.5 per cent of your fund value (you're under no obligation to use this service).

The adviser will take responsibility for organising your final salary pension transfer and ensuring the money arrives quickly and safely in your chosen pension scheme.  Not only does this make the whole process incredibly easy and saves you time, it also means the adviser will not need to charge you VAT, a saving of 20 per cent.

The cost of Stage Two is 1 per cent of your transfer value, subject to a minimum fee of £2,250 and a maximum fee of £7,500.  Should you wish to retain as much as possible in your tax privileged pension fund, the fee can be paid by you personally.  Alternatively, it might be possible for the fee to be paid from your pension fund.  If this is your preferred option, you should check with your chosen pension provider whether this is acceptable.

The Stage Two cost for a second final salary pension is fixed at £1,000.

Key Features Of The Final Salary Defined Benefit Review Service

Unlike many firms offering final salary pension reviews:

  • You will PAY NOTHING if you leave your final salary pension where it is, either because the specialist doesn't recommend the transfer, or you reject the specialist's positive recommendation, preferring instead to retain the guaranteed benefits from the scheme (some advisers will charge you for the review - BUT NOT THIS SERVICE).
  • You will NOT be required to accept the specialist's choice of pension provider if you have a particular provider in mind (many advisers insist you use their recommended pension provider - BUT NOT THIS SERVICE).
  • You will NOT be required to pay for on-going advice to manage your money if you want to manage it yourself (many advisers insist you use their on-going advice service which could cost you large fees into the future - BUT NOT THIS SERVICE).

We're of the opinion it's your money and you should have the ultimate say as to what happens to it!  If you're comparing our service with others, please make sure you're comparing on a 'like-for-like' basis. 

For Your No-Cost Final Salary Defined Benefit Pension Review, Please Complete The Form Below

Final Salary Defined Benefit Pension Review

To discover whether you should consider transferring your final salary pension from a former employer to a pension in your name, please complete all the fields of the form below.

  • Please tick all relevant boxes.
  • It's usually the name of your former employer. For example: British Telecom Staff Pension Scheme.
  • For example: stockmarket investments; peer-to-peer lending; commercial property.
  • If you have specific questions or information that might affect your transfer, please detail it in the box below (if there's nothing, please put N/A).
  • Your review cannot begin until we receive it. If you don't have it to hand, please email it to help@sippclub.com once you've submitted this form.
  • I understand SIPPclub will not provide me with any personal financial advice, and that SIPPclub neither advises on nor recommends specific investments or strategies. I accept that SIPPclub's role is to enable me to make informed financial decisions through the provision of information, and where relevant, by referral to providers of products and services appropriate to my needs. I agree to being subscribed to SIPPclub’s weekly newsletters, and I understand I can unsubscribe from them at any time. I’ve read and agree to SIPPclub's Terms and Privacy policies shown in the footer of this web page.

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AJ Bell Is Often The Best Value SIPP For Stockmarket Assets

That's our opinion.  Not just because AJ Bell was the first company to offer an online SIPP.  Nor that it's received many prestigious awards.  And not even because the wife of SIPPclub's Founder has an AJ Bell SIPP.  It's because it's one of the most competitive stockmarket SIPPs on the market. 

Over time, charges can wipe out a huge part of your fund.  We like AJ Bell because there are no set-up costs.  If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund.  And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment).  However, you should always compare charges in detail, because AJ Bell could be more expensive than other providers, depending on the type of stockmarket assets you hold.

Visit AJ Bell

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  • Please use an email address you can access. You can unsubscribe at any time.

As SIPPclub neither advises on, nor arranges, nor recommends specific investments or strategies, we're unable to say whether a SIPP or SSAS or any investment within it is right for you. Ultimately, it’s your money and your decision, and you should only proceed once you're satisfied you've undertaken sufficient due diligence. If you need advice, you should speak to your trusted adviser, or you could find a local adviser from Unbiased.co.uk.  Alternatively, we'd be pleased to introduce to a suitably qualified independent financial adviser.

Please read our full Terms which includes criteria for SIPPclub membership.


To avoid discrimination in contravention of the Financial Conduct Authority's principle of the ‘Fair Treatment Of Customers', this fee will NOT be discounted as some people have already paid for their Reports and Certificates at these levels.  If you complete the form above, it’s implicit you accept the above fee will be charged.

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