Should I transfer my defined benefit pension to a personal pension?

A defined benefit (DB) pension — sometimes called a final salary pension — pays a guaranteed income for life, based on your salary and years of service. Transferring it to a personal pension, such as a self-invested personal pension (SIPP), exchanges that guaranteed income for a cash sum (the 'transfer value') that you invest and draw down yourself.

The FCA treats DB transfers as high-risk transactions. If your transfer value is £30,000 or more, you are legally required to take regulated financial advice before you can proceed — the decision cannot be made without it.

Factors that are typically weighed include: the size of the guaranteed income you would be giving up; your health and life expectancy; whether you have other guaranteed income sources such as the State Pension; your attitude to investment risk; flexibility needs around death benefits and drawdown; and, from April 2027, the fact that unspent personal pension funds will be brought into estates for inheritance tax purposes — a change that affects how pensions fit into broader estate planning.

The FCA's own data shows that, for most people, remaining in a DB scheme is likely to be in their best interests. Transfers are not automatically unsuitable, but they are irreversible, so the consequences of a poor decision are permanent.

Because the right answer depends entirely on individual circumstances, speak to a regulated independent financial adviser who specialises in pension transfers for a personal assessment.