Pension freedoms were introduced in 2015 and advice is mandatory under government legislation for potential transfers valued at more than £30,000. This has created an increased demand for pension transfer advice.

Although many people see the large sums offered by pension trustees as an attractive proposition, they risk overestimating the fund value being offered against the real value of the guaranteed income provided by a Final Salary or Defined Benefit (DB) pension scheme, which is often underestimated.

The starting point for such pension transfer advice, as required by the Financial Conduct Authority, is that a transfer is unlikely to be in a client's best interests.

Money & Pensions Service/ FCA

Because moving away from Final Salary type pension arrangements is usually at the expense of losing valuable guarantees, each individual needs to consider many aspects of their personal circumstances before coming to a decision on the most appropriate course of action.

For initial impartial guidance on occupational pension schemes, we can signpost you to The Pensions Advisory Service (TPAS). TPAS is a part of the Money and Pensions Service which is an arms-length body of the Department for Work and Pensions (DWP), and details can be found here: https://www.pensionsadvisoryservice.org.uk/

We, along with the Financial Conduct Authority (FCA), would encourage anyone considering a transfer of defined benefit / guaranteed pension benefits to seek guidance on their retirement options and watch the video on pension transfer advice available on their website from this link: https://www.fca.org.uk/consumers/pension-transfer/advice-what-expect

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Seeking advice

Although we are qualified and authorised to provide advice in this area, we will only consider such an engagement in exceptional circumstances such as the client already having other sources of guaranteed income and the value of the pension representing a small proportion of their overall wealth. Any engagement of this nature will consist of a full review of the client's retirement plans and existing arrangements and how their existing DB scheme can be used to achieve those objectives.

We often receive requests from clients who have existing self-managed style pensions, such as a SIPP, and want us to provide a service to facilitate them transferring into this existing plan. We will not engage with these types of enquiry.

Costs & Charges

Our fee for this full retirement planning appraisal, irrespective of the recommendation outcome of the review, is £8,000 per scheme/policy, and we require that £4,000 of this amount per scheme/policy must be paid on engagement. It is therefore vital that individuals understand the underlying pension guarantees, in their various forms, before starting this process.

Timescales

Defined Benefit (DB) pension assessment times vary dependent on scheme responses and can take up to 8-10 weeks to achieve. This is not guaranteed, and the timescale may be longer, depending on the scheme.

We will not implement a pension transfer if we do not believe it is in a client's best interest, but we will still charge for our work.

We reserve the right to decline pension transfer enquiries if we believe that the cost would be disproportionate and not represent good value for that client.