Simon Prestcote IFA Barnet – should you transfer your defined benefit pension

Monday 13 February, 2017

Simon Prestcote, chartered wealth manager and independent financial adviser in Barnet considers - should you transfer your defined benefit (final salary) pension scheme?

In August 2016 Simon Prestcote, chartered wealth manager and independent financial adviser in the Barnet financial planning team reviewed whether you should cash in your defined benefit pension scheme in his article: Our Barnet IFA's review - should you cash in your final salary pension scheme?.  Since Brexit some transfer values have increased so we recommend anyone coming up to retirement with both defined contribution and defined benefit (final salary pensions) undertakes a full financial review with their independent financial adviser.  This ensures they make the best choices in retirement.  Since our article there has been considerable press comment which has prompted a Financial Conduct Authority (FCA) announcement.

Financial Conduct Authority (FCA) announcement on transferring final salay pensions

On 24th January 2017 the Financial Conduct Authority announced that they were aware that some companies ‘had been advising on pension transfers or switches without considering the assets in which their client’s funds will be invested.’  The FCA were concerned that consumers receiving this advice were ‘at risk of transferring into unsuitable investments or – worse – being scammed.’

Simon Prestcote, chartered wealth manager, IFA and member of the financial planning team in Barnet, North London said:

'We have a responsibility to offer thorough and appropriate independent financial advice.  Lonsdale Services independent financial advisers always conduct a full financial review for anyone that wants to transfer out of a defined benefit pension scheme into a defined contribution scheme.  We need to make sure that the client fully understands the consequences of making the switch.  If we feel it is in the client’s best interests to switch we will offer independent financial advice on the suitability of different investments into which to switch.'

Review more information on retirement planning in our Retirement Guide.  To find out what you should be considering at certain life stages read Your Retirement Options – freedom and choice: before, at and in retirement.  

Please note that defined benefit pension schemes provide guaranteed income for life that normally increases in line with inflation.  Following the European Referendum vote bond yields fell causing some defined benefit pension schemes to offer historically larger transfer values to members.  

 

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