What’s it all about?


The government’s pensions freedoms regulations give holders of a personal pension greater flexibility in how they can access and use their fund.

These freedoms do not apply to active final salary pensions schemes because these schemes offer valuable guarantees that would be expensive to replicate in a personal pension and historically, most people who have transferred out of a final salary scheme have been worse off in retirement as a result. In fact, not only did the government specifically exclude final salary pensions schemes from the Pension Freedoms, they made it a legal requirement for members to get advice on transferring if the transfer value of their benefits in the scheme are greater than £30,000.

However, if you have had a final salary pension scheme in the past but you are no longer an active member (either because you’ve left the company or the employer has closed the scheme), you may still be able to benefit from the freedoms. You can do this by ‘transferring’ your old pension into a type of personal pension called a flexi access drawdown account.

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