Last updated How we write our guides
Pensions Advice UK does not provide financial advice. We act solely as an introducer and can put you in touch with an FCA-authorised adviser with permission to advise on defined benefit pensions.
What is a final salary pension?
A final salary or defined benefit pension pays a guaranteed income for life, worked out from your salary and how long you were a member. It usually rises each year, and many schemes pay a pension to your husband, wife or partner if you die first. The scheme, not you, carries the investment risk.
Should I transfer my final salary pension?
For most people, no. The FCA starts from the view that a transfer is unlikely to be in your best interests, because you give up a guaranteed income for life in exchange for a pot that can fall in value and run out. For some people, a transfer can be the right choice, and only a specialist adviser can tell you whether you are one of them.
Advice is required by law over £30,000
If your final salary or other safeguarded pension is worth more than £30,000, your scheme must check that you have taken advice from an FCA-authorised adviser with the right permission before it can transfer it.
What an adviser will look at
- The income your scheme will pay, when, and how it rises
- The transfer value the scheme is offering, often called a CETV
- Your other pensions, savings and income in retirement
- Your health, your family and who depends on you
- How you would feel if a pot fell in value
Watch out for transfer scams
Be wary of anyone who contacts you out of the blue about your pension, offers a free pension review, or promises high returns or early access before age 55. Pension cold-calling is illegal in the UK. Check the FCA’s ScamSmart guidance if anything feels wrong.
What to expect
Enquiring with us is free. With your consent, we introduce you to an FCA-authorised adviser who specialises in defined benefit pensions. The first conversation is free, and the adviser firm will tell you in writing what it charges before you agree to anything.
Frequently asked questions
Do I need advice to transfer a final salary pension?
Yes, if it is worth more than £30,000. Your scheme must check you have taken advice from an FCA-authorised adviser with permission to advise on pension transfers.
Is transferring a final salary pension a good idea?
For most people it is not. You would give up a guaranteed income for life. The FCA starts from the view that a transfer is unlikely to be in your best interests, but it can suit some people, and a specialist adviser can tell you whether it suits you.
What is a CETV?
A cash equivalent transfer value is the amount your scheme offers to pay to another pension if you transfer out. It is usually guaranteed for three months.
Can I take a lump sum from a final salary pension?
Most schemes let you take part of your pension as a tax-free lump sum when you start taking it, in exchange for a lower yearly income. Your scheme can tell you what it offers.
How do I find an old final salary pension?
Search for the old employer on the free government Pension Tracing Service, then contact the scheme. See our guide to finding a pension from an old job.