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0121 355 4455
info@oaklandswealth.com
12A Duke Street
Sutton Coldfield
West Midlands
B72 1RJ

Oaklands Wealth Management Ltd

Can a pension transfer be refused?

If your question is relating to a Defined Benefit (DB) or Final Salary pension transfer the short answer is YES.

 A pension transfer request can be turned down by either or both of 2 sets of people:

  1. The Pension Scheme Administrators
  2. The Financial Advisor
  1. Refusal by The Pension Scheme Administrators

The DB/Final Salary scheme administrators can refuse a transfer if a member of a scheme is within 1 year of the normal retirement date of the scheme, or if they have passed the normal retirement date of the scheme.

However, it is always worthwhile approaching the administrators to ask whether a transfer would be possible, as they may use their discretion to still allow this.

  1. Refusal by A Financial Advisor

A DB transfer could be turned down by a qualified Pension Transfer Specialist, if she/he thinks the reasons or objectives to transfer are not valid.

You must always remember the starting point from The Financial Conduct Authority (FCA) is that for most people a pension transfer will not be suitable as they will be giving up valuable guarantees on their DB/Final Salary scheme.

For example, it would not be a valid objective if someone wishes to transfer because they are worried about the financial position of the company who sponsors the final salary pension scheme. This is because in most circumstances in the event of the collapse of a company the final salary scheme will be moved into the Pension Protection Fund (PPF).

Up to 90% of the defined benefit pension that a person would have received at their normal pension age is protected by the PPF.  This is up to a cap of £36,901 a year in the 2021/22.

Consideration can be given to other objectives and a person’s health.

For example, if an individual wants to withdraw a portion of their tax-free cash and take an income which they wish to vary or change because they have income from elsewhere and are concerned about income tax this could be a suitable objective.

If a person is in serious ill health, but the DB scheme does not recognise this as an illness which affects their life expectancy then this could also be a suitable objective.

If they do not have a spouse or partner and wish to leave their fund to someone else or a charity this along with other objectives could be a consideration.

It’s important to emphasise that there are no standard client objectives in guiding the advice to transfer a pension or not. It is entirely down to a consideration of individual circumstances.

Always consult a Pension Transfer Specialist

Remember to arrive at the right decision and if your transfer is valued at more than £30,000, then you must consult an advice firm that is authorised by the FCA and has the permissions to offer pension transfer advice.

Firms who can offer this advice are on the Financial Services Register as ‘advising on pension transfers and opt-outs’. The advisor you see must be suitably qualified with an advanced pension transfer qualification and have the relevant experience as a Pension Transfer Specialist.

It is here that you’ll go through the Triage and if necessary the Abridged advice stages mentioned above.

If you’d like more detail on the 3 Stage pension transfer process and obtain some free guidance on your next steps please click on the link below to our pension transfers webpage:

https://oaklandswealth.com/pension-transfers/

Interested in finding out more?

Seeking a second opinion on your financial future costs you nothing.

Simply call our friendly team on 0121 355 4455 or drop us an email to appointments@oaklandswealth.com to arrange a confidential chat.

Oaklands Wealth Management, founded by Helen Blackburn in 2004 advises clients around the Midlands on retirement planning, pensions & investments.

Her firm holds British Standard BS 8577 for client service & investment process.

Minimum investment is £500,000 (£650,000 for pension transfers).

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