Final Salary Pensions – Scotland

Following the introduction of pension freedoms by the UK government in 2015, there has been an upsurge in people seeking advice on their defined benefit pension (final salary pension).

Like many of those with Final Salary pensions you may have seen coverage in the press regarding Final Salary Pension Transfers. Or you may have spoken to colleagues who have transferred out of their Final Salary Pension scheme.

Record transfer values contributed to a large increase in number of people looking to transfer their defined benefit pension; with some schemes offering 33-40 times what the annual retirement income would have been.

But what does that mean for you? Are you eligible? Should you transfer? And what are the risks and benefits to transferring out of your Final Salary scheme?

Final Salary Pension Transfers - Key Numbers PNG

If looking for more information, call us on: 0141 328 3916 or email us at:

With defined benefit (final salary) pension schemes, the retirement benefit that you may expect is based upon length of service and earnings with the company during your tenure. Even if you leave employment ahead of the normal retirement date, your pension entitlement will be preserved and uprated every year to protect against inflation.

It is a common misconception that final salary pensions become ‘frozen.’ Generally, defined benefit schemes are an excellent way to provide income in retirement as there is no investment risk to the member as there would be with a private pension. Full benefit entitlement is contingent upon the ongoing solvency of the employer and the recipient being alive at the normal retirement age. However, from time to time defined benefit scheme members require advice. Good examples of when this may be relevant are:

  • The health of the member changes
  • A change of circumstances takes place e.g. divorce
  • The sponsoring employer runs into financial difficulty or the scheme becomes underfunded; the membership may then have concerns about their ability to maintain the scheme
  • The member is minded to retire ahead of the normal retirement age
  • Enhanced pension transfer terms are offered by the employer and the member requires advice around whether this represents good value
  • The member is unmarried
  • Where a pension transfer is required for personal reasons
  • The flexibility available under new pension freedoms is preferred to the security of income in the defined benefit scheme
  • The member is more inclined to pass on a lump-sum legacy from the pension fund than a spouse’s/ dependent’s pension
  • More income flexibility is required for tax planning

If you would like more information about potentially transferring your defined benefit pension scheme, email us at and request our free Guide to Defined Benefit Pension Transfers. Alternatively, get in touch and arrange to speak with a pension adviser – call us on: 0141 328 3916 or email us at:

For more, see our blog post on: Final salary pension transfers – are they worth the risk?