Do I need financial advice to transfer my defined benefit pension?

Full answer

A defined benefit (DB) pension pays a guaranteed, inflation-linked income for life based on your salary and years of service, so giving it up is a major decision. When you ask to leave, the scheme quotes a Cash Equivalent Transfer Value (CETV) -- a lump sum you could move into a defined contribution (DC) pot you control. Because DB benefits are valuable and the trade-off is hard to judge, the law (FSMA / FCA rules) requires regulated advice where the CETV exceeds GBP 30,000, and the adviser must hold the pension transfer specialist permission. The FCA's starting position is that staying put is usually in the member's best interest, so advice will not automatically recommend a transfer. Who it affects: members of private final-salary schemes; most public sector schemes (NHS, teachers, civil service) are unfunded and cannot be transferred out at all. Why people consider it: flexibility, the ability to leave the pot to family, or wanting to access funds from age 55 (rising to 57 from April 2028). The risks: you lose guaranteed income, take on investment and longevity risk, and may run out of money. Costs: advice fees can run into thousands and are charged whether or not you proceed. 2026/27 detail: pension contributions and crystallised funds interact with the Annual Allowance of GBP 60,000 and, once you flexibly access a DC pot, the Money Purchase Annual Allowance of GBP 10,000, which limits future tax-relieved saving. Tax on the eventual income still follows normal Income Tax bands. Use a pension calculator to model the income a transferred pot might produce versus the guaranteed DB income before committing, but a regulated adviser remains mandatory above GBP 30,000.

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