Questions To Ask Yourself Before Transferring Out Of Your Final Salary Pension

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Not a day goes by when we aren’t contacted by someone who has been encouraged to transfer their money out of a final salary pension and into non-standard investments and SIPPs instead.

Often, these people deeply regret their decision to move their pension, explaining that they were approached via cold call by companies promising high returns with minimum risk.

Some of those who contact us have been encouraged to move their pension by an independent financial advisor.

If you’re thinking of transferring out of your final salary pension, it’s crucial that you understand the significance of your decision. Not only could you be putting your money at risk, you may fall victim to a pension scam.

Here are some questions to ask yourself before making the move:


Do you have any medical conditions that may significantly shorten your life expectancy?

If you have a medical condition that could have an impact on your life expectancy, this needs to be taken into account before you make any big financial decisions.

If you’re purchasing an annuity, an unethical financial advisor who’s failed to take your health into account might sell you an unsuitable one that could see your annual income incorrectly predicted.

How comfortable are you investing in the stock market?

If you transfer out of a final salary pension, your retirement savings will be placed in financial markets. This will put your savings at risk and could see you losing money, particularly if you only intend to invest for the short term.

We often speak to people who agreed to move their pension only to discover further down the line that their savings have been plunged into high risk investments that they weren’t prepared for.

If your independent financial advisor encourages you to move your money to higher risk investments than you’re comfortable with, they could be guilty of financial mis-selling.

Are you aware of the fees involved and can you afford to pay them?

Some financial advisors recommend products to their clients without properly explaining the associated fees. This can see people having to consistently pay unexpected charges, often with no guarantee that their pension savings will be available when necessary.

A responsible and professional IFA who abides by government guidelines will be honest about fees and charges from the outset.

Are you comfortable managing your finances without a guaranteed income?

Blinded by promises of high returns and low risk investments, many people transfer money out of their pensions and into the stock market, without considering how they’ll fund their retirement without the protection of a guaranteed income.

If you’ve fallen victim to pension mis-selling or an investment scam, please get in touch with the team at Pension Justice. We’ll help you to fight for the justice you need and we’ll do everything we can to obtain compensation for you.

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