At Clifford Osborne we have the expertise and Financial Conduct Authority (FCA) permission to analyse your final salary pension scheme. We serve clients in East Sussex, in towns such as Eastbourne, Lewes, Seaford, Bexhill, Hastings, Newhaven, Crowborough, Uckfield, Tunbridge Wells, Brighton and Hove. To arrange a free initial discussion at your home, workplace or our offices contact us today.
Final salary schemes are a type of defined benefit final salary pension scheme offered by employers. The benefits you receive at retirement are based on your earnings and length of membership in the scheme.
Many final salary schemes have either been closed to new members or to all members over recent years, although they are still offered by some, mainly larger, employers.
A final salary pension scheme is typically run on behalf of the employer by the Board of Trustees which is responsible for all aspects of the scheme. This includes paying benefits to retired members. Daily management of the scheme is typically handled by the Scheme Administrator, who reports to the Board of Trustees.
A final salary scheme normally offers you an income in retirement based on a proportion of your final salary pension although other factors can be taken into account. It’s important to note that final salary doesn’t necessarily mean the actual salary that you are earning at the time you retire and draw benefits from the scheme.
In a nutshell
- Final salary pension schemes provide pension benefits based on your earnings and length of membership in the scheme
- Different schemes work in different ways so you should check your scheme’s terms and conditions
- Benefits at retirement may be provided as pure income or as a tax-free cash lump sum and income.
- Pension benefits may also be available to dependents in the event of your death or paid early if you fall ill before reaching retirement
- Benefits may increase each year to offset the effects of inflation.
There are many factors that should be taken into account before deciding to transfer a final salary pension, especially as some of the guarantees available can be very variable. For Example:
- You want control over how your pension assets are invested and how and when benefits can be paid
- You are single, divorced or cohabiting
- You are keen to retain flexible death and spousal benefits
- You want to use your pension fund for generational wealth creation
- You want to increase your tax free lump sum at retirement
- You are in poor health with a reduced life expectancy
- You own a business and are looking to purchase premises
- Your accrued pension is valued above £1.25 million.
We can carry out a detailed analysis of your final salary and offer sound advice about a final salary pension scheme including the option of transferring to a personal pension arrangement.
We will discuss all the options available to you, as well as the potential risks of any course of action, before agreeing a proposal to best suit your needs.
In many cases you are likely to be worse off if you transfer out of a final salary pension scheme. This is because the guarantees offered by such schemes are extremely hard to match.
However some individuals find that transferring to a bespoke personal pension arrangement is more suitable based on their own unique personal circumstances.
If you would like to know more about final salary pension schemes, please contact us. We are based in Eastbourne, East Sussex, with clients from Eastbourne, Lewes, Seaford, Bexhill, Hastings, Newhaven, Crowborough, Uckfield, Tunbridge Wells, Brighton and Hove.
Please see our other Pension Services: