What Is a Good CETV Multiple?

The CETV multiple is a simple shorthand: take the cash-equivalent transfer value your scheme offers and divide it by the annual pension you would give up. If you were promised £10,000 a year and offered a £200,000 transfer value, that is a multiple of 20. It is a quick way to compare offers and to sense-check whether a value looks unusually high or low, but it is a starting point for a conversation, not an answer in itself.

What counts as a typical multiple

There is no official “good” number, because the multiple that any scheme offers is driven by interest rates, your age and how generous your benefits are. A younger member many years from retirement, or one with a fully inflation-linked pension and a generous spouse’s benefit, will tend to see a higher multiple than an older member drawing near retirement with limited increases. The table below shows how the same £10,000-a-year pension can translate into very different lump sums depending on the multiple applied.

Why the number alone tells you little

A high multiple is tempting, but remember what it represents. A larger transfer value simply means the scheme is paying more to buy out an income it would otherwise guarantee for the rest of your life, and often your spouse’s. The more generous the multiple, the more valuable the pension you would be surrendering. That is why the FCA treats these transfers with such caution, and why our final-salary transfer guide stresses looking past the headline figure.

Two people offered an identical multiple can reach opposite, equally sensible decisions. Someone in poor health with no dependants may find a 20x value compelling, because they may not live to draw the pension for long and have no spouse to protect. Someone healthy with a partner to provide for may rightly turn down 35x, because the guaranteed income and survivor’s pension are worth more to their household than the cash. Age, other income, family circumstances and attitude to risk matter far more than where your multiple sits on a chart.

How to judge your own offer

Rather than asking whether your multiple is “good”, ask what it would cost to replace your guaranteed income another way, for example, the price of an annuity paying the same inflation-linked amount with the same spouse’s benefit. If your CETV falls well short of that, the multiple is arguably poor value however large it looks; if it comfortably exceeds it, the scheme is being generous, though that still does not settle whether transferring suits you. A specialist can run this comparison as part of the advice that is legally required for transfers of £30,000 or more.

It is also worth remembering that the multiple is a snapshot. Because it moves with gilt yields, an offer that looks average today might have looked poor in 2020 or generous in 2023. Chasing a higher multiple by waiting is a gamble on interest rates, not a strategy, and your transfer value is only guaranteed for three months in any case.

Consider two colleagues, each promised £12,000 a year. One scheme links increases to inflation and pays a 50% pension to a surviving spouse; the other pays flat, non-increasing amounts with no survivor benefit. Even at identical gilt yields, the first pension is worth far more, so its CETV, and its multiple, will be higher. Compare the two multiples side by side without knowing this, and you might wrongly conclude the first scheme was being unusually generous. It is not; it is simply promising more. This is why a multiple only becomes meaningful once an adviser has stripped out these differences and worked out what your specific benefits would actually cost to replace.

The practical takeaway is to treat the multiple as a conversation-opener, not a conclusion. Use it to check your offer sits in a sensible range and to compare like-for-like values over time, but never let it drive the decision on its own. The questions that actually matter, how long you are likely to need the income, who depends on you, how much other secure money you hold, and how you would cope if markets fell just as you started drawing down, are not answered by any multiple, however flattering it looks on the page.

This is information rather than personal advice, and investments can fall as well as rise. If you want your multiple interpreted properly, Vetted Wealth can match you free of charge with an independently vetted, FCA-regulated pension transfer specialist. You can also explore the wider pension transfer advice service to see what the process involves.

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