What’s Going On With Defined Benefit Pension Transfer Values?
In the past 12 months over 6 million people with defined benefit pensions have seen their transfer values shoot up. Many are being offered 30 times their annual income.
What is a defined benefit pension?
A scheme offered by employers that will pay a guaranteed pension income based on the amount of years that an employee has worked for the employer and the salary which they earned.With most defined benefit schemes workers have the right to swap their pension entitlement for a transfer. Lower gilt rates have led to the transfer value increasing, which means people are able to transfer a big lump sum.
For Example
For someone with a pension income worth £20,000, it is not uncommon to be offered 30 times that amount - in other words, a £600,000 transfer.
Source: BBC News ‘Defined benefit pension transfer values 'shooting up'
If you have a defined benefit pension and would like further information as to reviewing your Defined Benefit (Final Salary Scheme) then please email us with your contact details. We will then be in contact to discuss the Defined Benefit scheme and your requirements.
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