If you have a frozen final salary (defined benefit) pension scheme in the UK, now is the time to contact the scheme administrator for a transfer valuation.
I am aware that, historically, the conventional wisdom may have been to leave the scheme where it is.
However, a combination of recent changes to pension legislation and the sky high transfer payments which are now on offer from final salary schemes, has created an opportunity that is too good to refuse for many.
The reason for these record transfer values, without going too deep into the weeds, is primarily due to interest rates.
Interest rates have a huge effect on how pension scheme administrators must calculate member transfer values.
Very simply, the lower the rate, the higher the transfer value and today’s rates are at historically low levels, particularly in the aftermath of the Brexit vote.
It is worth warning of course, that a high transfer value doesn’t mean that it is automatically in your best interests to transfer your pension.
The payment from final salary pensions is secure after all (unless you worked for BHS or one of the many other companies with seriously underfunded pensions) and they often provide other valuable benefits.
As a result, the cost of replicating a final salary pension on the open market is high.
However, given current circumstances, it is certainly worth at least finding out what your scheme will offer in order to get you off their books.