Transferring a defined-benefit pension means giving up a guaranteed income for life for a cash sum you invest yourself. It is usually irreversible, and the regulator’s starting position is that it is unlikely to suit most people. Advice exists to test that honestly, not to arrange the move.
What defined-benefit transfer advice actually is
A defined-benefit, or final-salary, pension pays a set income for life, rising broadly with inflation, whatever markets do. Transferring swaps that promise for a one-off cash-equivalent transfer value (CETV) paid into a personal pension you then manage. Because it is so consequential and rarely reversible, the law requires regulated advice before you can transfer safeguarded benefits worth more than £30,000.
Not every firm may give it. Only a firm holding the FCA’s specific pension transfer permission, with a qualified pension transfer specialist, can advise on giving up safeguarded benefits. The adviser weighs what you would keep against what you would gain and issues a clear recommendation, to transfer or to stay. In most cases it is to stay. Our guide to pension transfers sets out the process, and broader pension advice helps if you are not sure a transfer is even the right question.
What a CETV is, and why a big number can still be poor value
The CETV is the lump sum your scheme offers today in place of the pension it promised. Multiples of twenty to forty times the annual income are common, so the figure can look enormous, and that is where people are misled. A large multiple is not the same as good value. The real test is whether that capital, invested with genuine risk and charges, could reproduce the guaranteed, inflation-linked income you are surrendering for as long as you and a partner might live.
Guaranteed income versus flexibility, what you give up
Every transfer trades certainty for control, and the two sides rarely look as even as a headline CETV suggests.
Transferring out
- You give up a guaranteed income for as long as you live
- You take on investment risk: the fund can fall or run out
- The automatic spouse’s or partner’s pension is usually lost
- Inflation protection becomes your job, not the scheme’s
Keeping the pension
- Income is paid for life, however long you live
- It rises broadly with inflation every year
- A reduced pension usually continues to your spouse
- No investment decisions, and no market risk to you
The safety net most people forget: the PPF
If your former employer fails, the Pension Protection Fund pays compensation, broadly 100% of the pension once you have reached the scheme’s retirement age, and around 90% if you have not, subject to a cap. A funded promise with a statutory backstop is stronger than it looks.
When a transfer can make sense, and when it cannot
For most people, staying put is the right answer, and an honest adviser will say so. A few narrow circumstances deserve serious analysis.
- 1
Serious ill health
A shortened life expectancy lowers the worth of a guaranteed lifetime income and raises the value of leaving capital to family.
- 2
No dependants, and a real preference for flexibility
With no spouse’s pension to protect and an informed appetite for control, flexibility may matter more than the guarantee.
- 3
A CETV very large relative to your needs
If the State Pension and other income already cover your essentials, you can take risk with part of a large value and stay safe.
- 4
A significantly underfunded scheme with a weak employer
Where the sponsor is fragile and funding poor, the eventual PPF outcome may be less than today’s CETV.
One argument for transferring has largely gone. A personal pension could once pass to family free of inheritance tax, while a scheme pension mostly died with you. From April 2027 unused pension funds fall within the estate for inheritance tax. Any reasoning built on passing the pot on tax-free needs rethinking; where estate planning is the aim, retirement planning often serves better.
What it costs, and how we vet specialists
Regulated transfer advice is detailed and carries real liability, so it is charged accordingly, usually a fixed fee for the full analysis and recommendation. A firm should quote it in pounds before it starts, and be paid the same whether the answer is transfer or stay; be wary of anyone whose fee depends on the transfer proceeding. Vetted Wealth is free to you: adviser firms pay us, and we introduce, we never advise. Where a transfer is involved we only match you with firms holding the FCA pension transfer permission. Compare specialists through our Devon and Cornwall hubs, and read how we vet advisers first.
Key takeaways
- A defined-benefit transfer is usually irreversible; the regulator’s default view is that it suits few people.
- Advice is legally required above £30,000, and only firms holding the FCA pension transfer permission may give it.
- A large CETV multiple is not proof of value: the test is whether it can reproduce a guaranteed, inflation-linked income for life.
- Transferring surrenders lifetime income, a spouse’s pension and inflation protection, and hands you the investment risk; the PPF backs the scheme if the employer fails.
- From April 2027 pensions count for inheritance tax, weakening a classic reason to transfer.
Where we operate
Vetted Wealth is live across Devon and Cornwall, with further counties opening through 2026. Choose your county to see the towns we cover and the advisers we have vetted there.
Most people start on their county page and then pick their town. If you would rather skip that, use the form on this page, tell us where you are and we will match you with a vetted defined-benefit pension transfer advice specialist near you.
Popular towns
Learn more before you speak to anyone
Our Knowledge library is free, has nothing to sell you, and is written to be the clearest explanation of each topic on the UK web.
Speak to a vetted defined-benefit pension transfer advice specialist
This page is information, not personal advice. When you are ready, we will introduce you to an independently vetted, FCA-regulated adviser, free, and with no obligation. Investments can fall as well as rise and you may get back less than you invest.