Many people are sitting on a fortune and just don’t know it. The cash equivalent transfer value of many final salary pensions (the cash a final salary pension scheme gives you to go away) can now run into hundreds of thousands of pounds. The headline numbers are eye wateringly huge. But all that glitters is not gold, as the recent British Steel Pension debacle proves. This Friday we unpick the facts about final salary pension valuations and whether one should ever consider transferring them.
If you are wondering, the answer is maybe, but only ever in certain circumstances. Ill health and alternate financial independence being two major considerations. After that, transfers get harder to justify. Many hate the idea of leaving nothing to their kids if they die young, so they still want to transfer. But what happens if someone takes the transfer and lives a long time, then runs out of money? The kids still get nothing and worse, neither does the transferrer – for the rest of life – and that could be a long time!
A transfer once made is an irrevocable decision. If you get it wrong, it could really hurt. Join us on Friday as Simon unpicks the issues.