When should I review my Final Salary pension scheme options?

 In Pensions & Retirement Planning

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You now have the freedom, if you wish, to move out of your final salary pension scheme, but many people don’t realise that the clock is ticking.

The recently introduced Pension freedoms legislation has led to a significant increase in the number of people considering whether they should transfer out of their final salary pension scheme in exchange for a lump sum cash payment.

People fortunate enough to have one or more final salary pension schemes should be aware however that there is often a deadline after which this option is no longer available.

For many schemes your Normal Retirement Date, normally aged 60 or 65 depending on the scheme’s conditions, is the last point at which you can obtain a transfer value and move your funds over to a personal pension. After this date the option to transfer is not always available and you must then accept the regular pension payments that have been accrued in the scheme.

The best time to review your Final Salary Pension Scheme will always be dependent on your own unique personal circumstances but, in my opinion, everyone should definitely review their scheme(s) in the twelve months leading up to their Normal Retirement Date. This is especially the case if you are a “deferred member” i.e. somebody who no longer works for the company offering the pension scheme and is therefore not still paying into it via their employment.

For many people the right decision will be to stay in their scheme and no further action will be necessary but, by asking a pension expert to review your situation prior to your Normal Retirement Date rather than after it, you will have at least preserved your choice of either staying in the scheme and drawing a regular income for life in retirement or moving your benefits away and you won’t have missed an important opportunity.

Everyone has the right to a cash equivalent transfer value in the 12 to 24 months leading up to their Normal Retirement Date and so, if it’s available, it is definitely worth considering.

The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.

Transferring out of a Final Salary scheme is unlikely to be in the best interests of most people.

What’s your next step?

There has never been a better time to look into the potential benefits of leaving a final salary pension scheme. Our expert pension specialists can help you today.

Book your free no-obligation meeting today, if you are considering whether to transfer out of your final salary pension scheme and need specialist advice.

The information contained within the blogs was correct at time of writing. If this area is of interest to you then do please feel free to get in touch as we would be more than happy to bring you fully up to date on any changes.

Jessica McGowan
Jessica began her career in Financial Services in 2001 and has gained a wide range of experience working with clients from all walks of life, guiding them through the many complex aspects of financial planning to ensure that they fully understand their objectives, options and desired outcomes. Jessica prides herself on delivering an excellent service for her clients ensuring that they are well looked after through every stage of the financial planning process, firmly believing in the empathetic and emotional side of the process as much as the facts and financials. What the Riverfall team say: “Jess has to be the most organised person on the planet! Her Outlook calendar is a thing of beauty!