Pension Transfers

Please download our Client Education Guide in Relation to Defined Benefit Pensions

Since the introduction of pension freedoms in April 2015, you now have more flexible options available for taking tax-free cash and income from defined benefit pensions, as well as potentially improved death benefits.

If appropriate, some investors aged 55 or over now have the option of transferring their defined benefit pension pots to personal or stakeholder pensions, a pension scheme with another employer, or a self-invested personal pension (SIPP).


Final salary and defined benefit pension advice


A defined benefit pension scheme – sometimes called a ‘final salary pension scheme’ – is one that promises to pay out an income based on how much you earn when you retire. The amount normally depends on your service and your earnings at retirement or in the years immediately preceding retirement. Unlike defined contribution pensions, the amount you’ll get at retirement is guaranteed, and it will be paid directly to you – you won't have to use your pension pot to decide your next move.


Transferring a final salary pension or defined benefit pension

We can offer individuals advice on final salary pensions by reviewing their existing pension plans and establishing their individual needs and personal circumstances. In most cases you’re likely to be worse off if you transfer out of a defined benefit scheme, even if your employer gives you an incentive to leave. However, with some savers being tempted to give up valuable final salary or defined benefit pensions to invest in the financial markets instead, whether this is a sensible idea will rest on individual circumstances.

Advice on personal pension arrangements

We offer professional advice for clients who have personal pensions and are either pre retirement or at retirement.

Thorough review of your personal circumstances


IJP Wealth Management will assess your particular situation and make recommendations on whether transferring out of a defined benefit pension is the right approach to take. Whether you transfer out of a defined benefit pension or not, it is a complicated decision that cannot be answered without a thorough review of your personal circumstances. To ensure that you fully understand the advantages and disadvantages of transferring out, it’s actually a legal requirement that any defined benefit transfer over £30,000 must be signed off by a suitably qualified financial adviser.


Advantages and disadvantages of transferring out


In reality, there’s likely to be both advantages and disadvantages of transferring out of a defined benefit pension. It’s important to understand that the decision could have major consequences for your quality of life in retirement. For example, while transferring out of a defined benefit plan could provide a more flexible retirement income and the possibility of passing your wealth on to future generations, it will also mean sacrificing risk-free income and inflation protection.


Providing you with tailored financial advice


While high transfer values may seem attractive, switching to a defined contribution pension plan could potentially leave you with a financial shortfall in the future. IJP Wealth Management will provide you with detailed advice in relation to pension transfers, specific to your own unique situation. We’ll help you compare the transfer value you’re likely to receive with the guaranteed benefits you’ll potentially be giving up and discuss the range of options available.



A pension is a long-term investment. The fund value may fluctuate and can go down, which could have an impact on the level of pension benefits available.

Your pension could be affected by interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.

Transferring out of a Final Salary scheme is unlikely to be in the best interests of most people. Our advice process will allow us to make a recommendation based on your personal circumstances.