What Does Transferring Mean?
A DB pension transfer means giving up your guaranteed final salary pension in exchange for a cash lump sum (the cash equivalent transfer value, or CETV) which is moved into a defined contribution (DC) pension such as a SIPP. Once transferred, you manage the money yourself (or through an adviser) and use it to fund your retirement through drawdown or annuity purchase.
What You Give Up in a Transfer
Understanding what you are surrendering is essential before considering a transfer:
| DB Benefit | What You Lose |
|---|---|
| Guaranteed income for life | Replaced by investment risk — your pot could run out |
| Inflation protection | No automatic increases; depends on investment performance |
| Spouse's pension on death | Replaced by whatever remains in your pot (could be more or less) |
| PPF protection | No safety net if investments fail |
| No investment decisions required | You must manage investments or pay someone to do so |
What You Gain from a Transfer
- Flexibility — access your pension from age 55 (57 from 2028) with no scheme rules restricting how much you take
- Death benefits — your entire remaining pot can pass to any beneficiary, potentially tax-free before age 75
- Investment control — choose your own investments and potentially achieve higher returns
- No employer risk — removes dependency on your former employer remaining solvent
- Consolidation — combine multiple pensions into a single pot for simpler management
When a Transfer Might Make Sense
The FCA's starting position is that retaining DB benefits is likely to be in most people's best interest. However, circumstances where a transfer could be appropriate include:
- Serious health condition — reduced life expectancy means you may not benefit from the lifetime guarantee, and a transfer allows you to pass wealth to family
- No spouse or dependants — if you have no one to benefit from the spouse's pension, the death benefits of a DC pot may be more attractive
- Employer insolvency risk — if the sponsoring employer is in severe financial difficulty and the scheme is heavily underfunded
- Very high CETV relative to benefits — historically low interest rates inflated CETVs; a very high transfer value may represent genuine value
- Substantial other guaranteed income — if you have other DB pensions or a large State Pension, additional flexibility may be more valuable than more guaranteed income
Transfer Values in 2026
CETVs have fallen significantly from their 2021–2022 peaks as interest rates have risen. Higher gilt yields reduce the present value of future pension payments, resulting in lower transfer values. This means the amount offered for transferring today is typically much less than it would have been a few years ago.
A common benchmark is the transfer value multiple — the CETV divided by the annual pension. Multiples above 25–30 were common in 2021; in 2026, multiples of 15–22 are more typical. Lower multiples generally make transfers less attractive because you are receiving less capital relative to the income you are giving up.
The Advice Process
If you request a CETV quote and wish to proceed with a transfer, the process involves:
- Initial consultation — the adviser gathers information about your financial situation, objectives, and attitude to risk
- Transfer analysis — the adviser analyses your DB benefits, CETV, and models various outcomes
- Suitability report — a written recommendation explaining whether a transfer is or is not suitable for you
- Implementation — if the adviser recommends a transfer and you agree, they facilitate the process
Next Steps
If you are considering transferring a final salary pension, start by requesting an up-to-date CETV from your scheme. This is free and available once every 12 months. Then seek advice from an FCA-regulated pension transfer specialist who can assess whether a transfer is appropriate for your specific circumstances.
For further reading, explore our guides on DB pension lump sums, scheme funding, and deferred DB pensions.