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The Key Final Salary Pension Transfer Rules

09/10/19 Final Salary pension Transfer

Could a final salary pension transfer be a way forward for you? Before diving into the detail of what is involved a useful first step is to understand the pension transfer rules. You may save yourself a lot of time and trouble.

Excluded Final Salary Pension Schemes

Transfers from a final salary pension scheme are at the discretion of the scheme Trustees. Most schemes will allow a transfer but not all. Unfunded schemes such as the NHS, Teachers Pension, Armed Services and Police schemes will not allow transfers.

Age Of The Pension Holder

In most circumstances it is not possible to access any funds from a pension until the pension holder is at least 55 years old. Unfortunately, there are scammers who will try to persuade the unwary otherwise so be on your guard.

Those already taking retirement income are not allowed to transfer out. Most Final salary pension schemes will not allow a transfer out if the member is within one year of the normal retirement date of the scheme.

Pension Fund Value

If the pension fund value is £30,000 or more then there is a legal requirement to take financial advice. Pension schemes will check that advice has been given by an appropriately qualified person before actioning a transfer. They will often refuse to transfer if there is no evidence of advice even if the transfer value is less than £30,000.

Adviser and FCA Restrictions

The Financial Conduct Authority (FCA) oversees the activities of all those involved in financial services. This includes Financial Advisers.

In 2018 Christopher Woolard, FCA’s Executive Director of Strategy and Competition said ‘Defined benefit pensions are valuable so most people will be best advised to keep them. However, where people are considering a transfer, it is vital that they get good advice to enable them to make an informed decision.’

The FCA requires those offering transfer advice to be appropriately qualified. They have also laid down strict guidelines on how the transfer advice process should be conducted.

Advisers have an obligation to follow FCA guidance. If they do not they could lose their permissions to conduct business and face financial penalties. If an individual were to request their adviser to skip certain parts of the process to speed things along it is highly unlikely a credible adviser would do so. More on this issue in the insistent client section below.

Recently the FCA has placed further obligations on pension providers and trustees. These pension transfer rules, checks and balances are necessary to protect the consumer but they do make pension transfer process time consuming.

Insistent Client Status

Should anyone take financial advice and then decide to proceed with a final salary pension transfer against the recommendation of a financial adviser they are referred to as an insistent client. It is possible a financial adviser may proceed with the transfer when instructed to do so by an insistent client but they may choose not to.

There are strict FCA guidelines in place governing the insistent client process. Those guidelines dictate insistent client status is not a short cut. The adviser must proceed through the full advice process regardless.

The above covers the main pension transfer rules and regulations but it is not an exhaustive list. Individual schemes may have their own requirements. Should you wish to consider a transfer in more detail then please do not hesitate to get in touch on 0800 043 8341. Alternatively, complete the contact box below and one of our advisers will call you back. If you have a question simply open a Chat or Email us and one of our friendly staff will be happy to help.


This blog is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investment or course of action. The past is not a guide to future performance. The value of investments can go down as well as up and you may not get back the full amount you invested. Tax and financial regulations can change. Any figures quoted above are correct at the date of publication.