What is a final salary pension?

What do people mean by a final salary pension?

It's a type of defined benefit, or DB, scheme that pays a retirement income based on your salary and how long you've worked at the company. 

DB schemes include final salary and career average pension schemes, which are often only available in the public sector or in older workplace pension schemes.

We're often asked if you can transfer your final salary pension to us. 

Well, in some ways, pensions are quite straightforward. In other ways, they're complex. But pension transfers fall into the latter category. If your DB pension is worth over a certain amount, the government insists you must take advice from a qualified adviser before you can make a transfer. 

At Fidelity, we only accept transfers from DB pension schemes If you've taken financial advice and your adviser confirms is in your best interests - regardless of how much your pension is worth. We think it's important that you transfer your pension for the right reason and that it works for you

Before going ahead, we recommend a full and thorough comparison of the benefits, charges and features offered. After seeking advice, if you still want to transfer, make sure you find a provider that suits your needs. Every provider's transfer process is different, but with Fidelity, you can call to discuss the best way forward and either apply online or by post. Whatever works for you.

Our retirement service may also be able to provide you with advice. You can learn more about pension transfers and retirement service in our Pensions and retirement section on our website. 

Once you've decided how you want to transfer, if your provider processes it speedily - and has signed up to an industry approved paperless transfer service - it can take around 10 days. If not, it might take 10 weeks or more. 

When the process begins, you might not be able to switch, top up or sell the investments you're transferring, until the move is complete. Here's the full list of the types of pensions you can transfer to Fidelity. 

There is also a minimum pension transfer value. The same amount applies for transferring other pensions into an existing Fidelity SIPP, unless you're already taking - or about to take - money from it. 

So, if you're thinking about transferring your final salary - or other pension - make sure you research it carefully first. And if it's definitely right for you, we're happy to help.

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