‘I transferred my £570,000 final salary pension – and regret it’
Tideway’s James Baxter comments in this article.
Final salary pension transfers are grinding to a halt following curbs by the City watchdog and insurance companies’ fears of an impending mis-selling scandal.
At the same time, the portfolios of the hundreds of thousands who have already transferred have begun to suffer as a result of recent stock market falls.
As more cases emerge of savers who regret giving up gold-plated pensions, access to the “pension freedoms” is being restricted. It is thought that since 2015, about a quarter of a million people have swapped guaranteed “final salary” pensions for “defined contribution” plans that allow far greater flexibility under the pension freedoms rules.
Transfer values have been incredibly generous – a £10,000-a-year pension can become £350,000 or more in cash – because of low interest rates. But the Financial Conduct Authority is worried people have been too quick to give up guaranteed retirement income and may run out of cash.
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