Most pension schemes come with safeguarded benefits, which has to do with defined benefits and guaranteed pensions. If you are doing a pension transfer, you definitely need a financial adviser who understands the details. After all, you don’t want to forfeit your benefits as you push through with the pension transfer. Some of the things you might overlook out of ignorance include Guaranteed Annuity Rates (GARs) and Guaranteed Minimum Pensions (GMPs).
Since you are likely to lose your safeguarded benefits during the pension transfer process, you must talk to a financial adviser. It is a requirement for individuals with safeguarded benefits worth more than £30,000 to speak to a financial adviser. Some of the things you cannot do without advice include the following:
· Converting the benefits into a form of flexible benefits under the same scheme.
· Transferring the benefits to another scheme for flexible benefits.
· Taking a cash lump sum with respect to the benefits from your current pension scheme.
If your benefits are less that £30,000, talking to the financial adviser is something you will have to make up your mind on. If you are doing a pension transfer, talk to us at KLO Financial for the best advice.