Transferring Your Final Salary Pension: 3 Things to Consider

KLOFinancial |

Since 31st March 2017, it has been estimated that around 80,000 final salary pension schemes have been transferred. More people are likely to be considering this as an option due to the fact that large transfer sums are currently on offer for some of those looking to switch.

Since the pension freedoms were introduced back in April 2015, many savers have decided, or are deciding to switch to a self-invested personal pension (Sipp). A Sipp means that the responsibility for investing is down to the individual.

Those who are looking to transfer their final salary pension should be aware of taking too little risk, as individuals can end up missing out on growth. What can those looking to transfer their pension in order to invest for retirement consider?

How long will I need to make my savings last?

One of the most important questions a pension saver will need to ask themselves before transferring is whether their savings will last over the duration of their retirement.

Before transferring, savers should contact a financial adviser to discuss which options can benefit them.

How can transferring my Final Salary Pension affect tax?

A minority of people are moving their final salary pensions into a Sipp for estate planning reasons. This means they can take advantage of the facility to pass pensions on to named beneficiaries in a tax-efficient manner.

Individuals may consider other sources of income in order to exhaust other assets that would eventually be subject to inheritance tax before they pass away. This means that those looking to reduce inheritance tax must leave a high proportion of their Sipp portfolio in growth assets.

It’s important to take a balanced approach to investing for your retirement in order to maximise growth as well as take the appropriate amount of risk.

What next?

If you’re interested in finding out more about transferring your final salary pension, utilising pension freedoms and investing for retirement, talk to our financial advice team. Please call us on 01926 492406 or email us at to make an appointment.