Defined Benefit Pension Advice

Defined Benefit Pension Transfer FAQs & Fees

Transferring from a scheme like this involves giving up valuable guarantees.

There are three stages to the advice we’ll give you; the first two are completely free, the final full advice stage is subject to a fee.

Defined Benefit Pension Transfer FAQ's & Fees

Are there any circumstances where Grove will be unable to assist me?

  • Clients currently active within the scheme, unless they are retiring or leaving employment.
  • Transfers overseas (QROPS) or schemes based outside of the UK (ROPS).
  • Clients not habitually resident in the UK.
  • Transfer values under £15,000 – unless the scheme requires financial advice to be taken.
  • Unfunded pension schemes (e.g., NHS, armed forces, police officers pension scheme, teachers, etc.)

What are your fees for defined benefit pension transfer advice?

1. Triage – Free

As soon as we receive your completed enquiry form, we’ll send you some useful information about the risks of transferring a defined benefit pension scheme. This stage is free.

There is a short video you can watch and details that are written in plain, easy to understand English.

This is the first stage of helping you to understand what you’ve got. We have FCA regulated advisers you can speak with before deciding to proceed to the next stage.

2. Abridged Advice – Free

This stage of our service is also completely free, where we provide more detailed advice specific to you and your pension. We analyse your personal circumstances along with the details of your pension and what you have told us you want to achieve. We’ll send you a detailed report, again written in plain, easy to understand English. Once you’ve received it you can arrange to discuss its contents with one of our specialist advisers.

The report will conclude that either transferring your defined benefit pension is not advisable or we are unable to ascertain suitability and can only do so by proceeding to Full Advice. You can decide whether you proceed to the next stage or not, if you don’t go any further, then it hasn’t cost you anything for the details you have so far.

Read our Guide to Abridged Advice for a more details.

3. Full Advice – Paid

For this stage of our advice service there is a charge, whether you decide to go ahead and transfer your pension or not. All the details of our fee will be included in our report.

Full advice will provide you with a definitive answer as to whether a transfer is suitable for you, and will include, where applicable, detailed additional information and analysis about investment risk and scheme charges.

The fee is dependent on your pension transfer value as follows:

Your Pension ValueMaximum initial adviser charge
Up to £250,0003% with a minimum of £3,950
On the next £750,000 (total value £1m)2%
On the balance (over £1m)1% up to a maximum total fee of £26,000

If you have been introduced to us by another professional adviser, the charges may be less than this.

After our Abridged Advice you will be told what the actual fee would be if you decided to proceed to Full Advice. If you do not proceed, then there is no fee paid.

What are the main advantages of defined benefit pension schemes?

These schemes promise you set amounts of benefits in retirement, underwritten by the employer and ultimately backed by statutory protection. You do not have to worry about investment risk or the risks involved in converting a pension fund to income. This is all taken care for you. These schemes also offer some protection against inflation and will pay a pension to a spouse or partner on your death.

How long does a defined benefit pension transfer take?

To receive your initial indication as to the merits of a pension transfer, the Abridged Advice, usually happens within about two months, however, the whole process of receiving Full Advice and if a transfer is to proceed, is significantly longer, around 7 to 8 months on average.

What if I can’t afford to pay for full advice?

There is an option for us to carve-out individuals in serious financial difficulty or serious ill health.

For these individuals, a fee is only paid if a pension transfer goes ahead, in which case our fee can usually be deducted from the pension fund itself.

We will automatically investigate if you are eligible for carve-out at the Abridged Advice stage.

If you receive Full Advice and decide not to proceed with a transfer, assuming you have been eligible for carve-out, you will not have to pay a fee.

If I proceed with full advice, when do I have to pay the fee?

You do not have to pay the fee until the very end of the process has been completed.

In most cases, if a transfer has gone ahead, we would expect to be able to deduct the fee directly from your pension fund, so you won’t have to do anything.

If a transfer hasn’t gone ahead, then at the final stage of closing your file, we will write to you requesting settlement of the fee.

When is the latest I can stop my enquiry without paying a fee?

You can complete the process right up to us providing you with Abridged Advice. If you decide not to proceed any further, then you will not pay any fee.

This means you will have been able to discuss your case with a fully qualified and FCA regulated adviser AND received our Abridged Advice report, where the conclusion will either be a transfer is not suitable for you or we are unable to ascertain suitability.

Can I pay the fee out of my pension fund?

If a transfer goes ahead then you can usually pay the fee direct from the pension fund. This has the advantage of it being deducted from a virtually tax-free fund, rather than being paid out of taxed income or savings.

However, If you prefer, you are able to pay us by cheque or via bank transfer, this might be preferable if you are transferring your pension for inheritance tax planning purposes and wish to maximise benefits.

Can I transfer my DB pension without your help?

The short answer is no. If the value of your defined benefit (DB) pension scheme is £30,000 or above, you have to get advice from a firm who is authorised and regulated by the Financial Conduct Authority and that hold special authorisation allowing them to conduct DB pension transfers.

What if your advice is not to transfer but I want to go ahead anyway?

If you decide not to take our advice, in certain circumstances we could still proceed with transferring your DB pension if you insist. You can discuss this option with your adviser.

However, we reserve the right to refuse such a transfer if it is particularly unsuitable.

Read our Guide to Insistent Clients for more details.

Pension Transfer Consultation

Get Started Today

Free Pension Transfer Guide & Consultation
If you would like to find out if transferring your pension or taking a cash lump sum is suitable for you, we can provide a free initial Pension Transfer Consultation known as abridged advice.

Simply complete your details below, and we will send you our Pension Transfer Consultation Pack and Enquiry Form.

As part of the consultation we will look at:

  • What existing pension plans you have in place.
  • What your plans are for retirement.
  • Your needs for flexibility and control.
  • The likely cost of more in-depth advice.

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Defined Benefit Pension Transfer Warning

Transferring away from a defined benefit pension scheme means you will lose valuable guarantees.

Taking benefits early will almost certainly reduce your pension income in retirement and is only suitable for a limited number of people and circumstances. This should not be seen as an easy option for raising cash.

If you release all your money from your pension early you will not have anything left to provide you with income in retirement.

When releasing cash from your pension, usually up to 25% is tax free, the balance is taxed at your marginal rate at the time and could change in the future.

Watch the FCA video explaining the expectations of financial advisers when advising you on defined benefit pension transfers.

Grove Pension Solutions Ltd is authorised and regulated by the Financial Conduct Authority (Reference number 465051).

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