As the Final Salary Transfer scandal rolls on, concerns have been raised over the recent wave of NHS pension transfers. Reports suggest almost 250,000 staff have transferred from the scheme in the last 3 years, despite the fact that NHS Pensions could actually be more valuable and have better benefits in the long term, than private pension schemes.

Why are these schemes so valuable?

Final Salary / Defined Benefit pension schemes normally offer a guaranteed pension income, unlike private pensions, such as SIPP’s, which are subject to market performance.

Whilst SIPP’s may offer more flexibility in terms of investments, there is also more responsibility for the investor themselves to make sure their pension pot lasts throughout retirement.

Also, the investments contained in the SIPP could be high-risk and unregulated, which are not suitable for the average investor.
Final Salary / Defined Benefit pension schemes may also include generous benefits for spouses, which may not be offered by private schemes.

It’s only in certain cases that you’d be better off transferring out of a Final Salary scheme and this should be considered by the Financial Adviser when making a transfer recommendation.

 

So Why Are People Transferring Their NHS Pensions?

 Many people transferring their final salary scheme usually do so on the advice of a Financial Adviser. 

Unfortunately, that advice is not always in the best interest of the client, despite the tempting incentive of tax-free cash or the promise of more money in the pension pot, doing so may actually leave people worse off in retirement.

In fact, in 2017 the Financial Conduct Authority conducted a review into Defined Benefit transfer advice and found that less than half of the recommendations they looked at were actually suitable for the client.

 

What Can I do if I transferred my NHS Pension?

If you transferred out of your final salary scheme – it’s possible you may have been mis-sold and could have a case to claim compensation. We offer a free assessment to help you find out if you could make a claim. We will also explain all the options available to you should that be the case.

 

 

 

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