The pros and cons of possible transfers.
The introduction of pension freedoms in 2015 has given you much more choice over what can be done with your pension. However, this freedom only applies to Defined Contribution (DC) schemes, not Defined Benefit (Final Salary) schemes. For this reason, some savers in Defined Benefit (DB) schemes are tempted to switch to a DC scheme to enjoy the flexibility offered.
There are some important advantages offered by a DB scheme including:
- The pension lasts for your lifetime giving you a secure income with little risk
- Your spouse can still benefit after your death
- The pension is unaffected by stock market ups and downs
Transferring to a DC scheme can also offer some advantages, including:
- Transfer values are high at the moment
- They offer flexibility over when and how much you draw on your pension
- You can take cash as early as age 55 and defer the taxed pension until it is needed
However, it is important to fully understand the advantages and disadvantages of both schemes before making such an important decision as, should you decide to transfer, your decision will be irrevocable.
In fact, as a measure of protection, if your DB pot is £30,000 or more the law requires that you must seek specialist financial advice before deciding to transfer out of your DB scheme.
How Anstee & Co can help you with your pension.
At Anstee & Co. we have advisers with specialist knowledge in the pension transfer area who will be happy to discuss your situation and try to help you make the right decision for you.
Meetings can be arranged at a time and location that is convenient to you. This may be your home or office. We have offices in Kettering, Stamford, Birmingham and London. We also make use of meeting rooms in Bedford, Northampton, Warwick, Wellingborough and Towcester.
Why not arrange a meeting today to see how we can help you.