Pension planning – Defined Benefit transfer advice

What is a DB or Final Salary Pension?

Broadly there are two types of pensions, Defined Contribution (DC) and Defined Benefit (DB). The former is where you (and often your employer) pay a monthly amount into a pension pot. The funds are invested and the pension which you can draw in retirement will depend on how much you put in and the growth that you get on the funds. This is by far the more commonplace and anyone who is currently in employment is likely to have at least one, thanks to the introduction of auto-enrolment, which made it mandatory for employers to offer their employees a workplace pension.

A defined benefit pension however is where a promise is made by the employer to pay a percentage of someone’s final salary (or an average in some cases) once they retire. The longer you work for the employer, the greater the percentage you receive in retirement. The income is guaranteed and carries no risk (other than the potential insolvency of the scheme and sponsoring empl