Non- Pensioners

Transferring out

 

Transferring out means swapping your future benefits in the Scheme for a one-off sum of money that is transferred into a different pension arrangement.

Transferring out can give some members more choice about how and when they use their pension benefits. It is only an option for non-pensioners who are more than a year under their normal retirement age (which is usually 65).

The sum of money that you could transfer out is known as a ‘cash equivalent transfer value’, ‘CETV’ or ‘transfer value’. To find out what the transfer value of your benefits would be, you ask the Pensions Office for a transfer value quote. This quote is valid for a ‘guarantee period’, which is normally up to three months.

You should think carefully before transferring out. You would be giving up guaranteed future pension income in return for income that might not be guaranteed and could vary depending on how you manage it. You should take independent financial advice – and legally must do so if your transfer value is over £30,000. You should be very careful to avoid scammers and unscrupulous financial advisers.

Before the transfer value can be paid to your new scheme you will have to provide a signed statement from the independent adviser confirming you have taken appropriate advice and the adviser was authorised to give your advice.

Taking advice, whilst important in being able to assess all your options, can be very daunting and can often be very expensive. In recognition of this a Guide to Good Practice for financial advisers has been created by the Personal Finance Society. We strongly suggest you read this to help you understand what good practice looks like.

You can find authorised financial advisers by searching the Financial Conduct Authority register (https://register.fca.org.uk/) or contacting the Citizens Advice Bureau. Also check to see whether the adviser carries the Gold Standard mark.

Even though transfer values can seem very large, transferring out is unlikely to give you as much total pension income over your lifetime as the Scheme, on a like-for-like basis.

The Pensions Office will give you a transfer quote within three months of receiving the request. The transfer value quoted will be guaranteed for a three-month period, starting from the date it was calculated.