Find out if the defined benefit (DB) pension transfer advice you received was right for you. If you received unsuitable advice you could be entitled to compensation.
Did you receive advice on transferring your DB pension?
The FCA and TPR believe that it’s in most people’s best interests to keep their DB pension. Find out more about what changed when you transferred.
Our assessment of pension transfers between 2015 and 2019 found that some advisers may have given unsuitable advice to transfer out of a DB pension scheme (also known as a 'final salary' pension) into a defined contribution (DC) pension scheme.
If you were advised to transfer out of a scheme, or if you transferred because the firm encouraged you to do so, you may have received unsuitable advice.
You can use our advice checker if:
- you transferred out of a DB pension scheme after April 2015, and
- an FCA regulated firm advised you to transfer
You can find out if a firm is FCA regulated by checking the Financial Services Register.
If you received unsuitable transfer advice, you could be due compensation. To receive this compensation, you will need to complain.
Please note, if you were always going to transfer, no matter what your adviser said about the disadvantages, it’s less likely that you have a valid complaint.
But if you would have reconsidered your options, had you been advised not to transfer, you should consider complaining.
Pension transfer advice video series
Watch our 5 step-by-step guides explaining what you should expect when taking advice in connection with transferring out of a defined benefit (DB) scheme, and into a defined contribution (DC) scheme.
It's quick, simple and free to make a complaint or a claim.
You don’t need to use a claims management company or a solicitor. If you do, you will have to share any compensation you get with them.
Step 1: Contact the firm that gave you advice
You should first complain to the firm that gave you advice.
Contact them as soon as possible in writing, so you have a record of what is said.
In general, financial services firms we regulate must respond to your complaint in writing within 8 weeks. They must tell you whether the complaint has been successful or why they need more time to investigate the complaint.
Once the firm has looked at your complaint, they will send you a final response letter with their findings.
Step 2: Complain to the Financial Ombudsman Service
If you’re not happy with the response you receive from the firm, or you do not hear from them within 8 weeks, the Financial Ombudsman Service may be able to help.
The ombudsman service is an independent service for settling disputes between financial services firms and their customers. It will ask the firm to explain what it thinks happened and then decide whether to uphold your complaint.
It’s completely free to use and claim experts will support you at every stage of your claim, helping you submit the right information
It’s important you contact the ombudsman service within 6 months of receiving a final response from the firm, or it may not be able to help with your complaint.
If the company is no longer in business
If you’ve received poor DB transfer advice, and the company that advised you is no longer in business, you can submit a claim to the Financial Services Compensation Scheme (FSCS).
The FSCS may be able to compensate you up to £85,000 if it decides you have suffered a financial loss as a result of the poor advice you received.
The FSCS is a free service set up by Parliament and is funded by the financial services industry.
You may be taking ongoing advice on your investments. This may include paying a regular or ongoing fee to your adviser for services such as reviewing your investments.
If your complaint was successful, you received compensation, and you’re taking ongoing advice, you can still decide whether to continue with this advice.
If you choose to continue with ongoing advice, you can decide which adviser to use for this service.
Whether or not you take ongoing advice in a DC pension scheme, you should regularly monitor your investments to make sure they meet your retirement needs.
When you transferred your DB pension to a DC pension, you gave up a guaranteed lifetime income that usually increases each year in line with inflation.
Instead, you invested the value of your DB pension (known as the 'transfer value') to build up a personal pot of money.
When you die, you can say who should receive your remaining pension pot. If you’d stayed in your DB scheme, your partner may have continued to receive a pension at a reduced rate after your death.
Accessing your pension pot
In the DB scheme, you could have chosen to give up some of the income so that you could receive a tax-free lump sum.
In the DC scheme, you can choose how to use the pot for allowable tax-free lump sums and retirement income.
You may have already accessed your pot. But unless you choose to buy a guaranteed lifetime income, known as an annuity, there are no guarantees that your pension pot will let you maintain your chosen income for the rest of your life.
This is because the value of your pension pot is affected by changes in the value of the assets you invest in (such as shares, bonds and property) and it moves up and down in value.
Responsibility for payments
In the DB scheme, the employer and trustees of the scheme were responsible for making sure there was enough money to pay your pension income at your retirement date. You paid no charges to manage your pot.
In the DC scheme, you or your adviser are responsible for managing the pot and making sure there is enough money to pay your pension income until it runs out.