Do you have a final salary pension scheme and recently received a Cash Equivalent Transfer Value (CETV)? Accepting the lump sum offer may or may not be the right decision for you.
What is a Cash Equivalent Transfer Value (CETV)?
A Cash Equivalent Transfer Value (CETV) is a lump sum offered to people with a final salary pension scheme, sometimes called a defined benefit (DB) pension. The lump sum may be offered and can only be accepted if you agree to give up your future pension claims.
The figure will be calculated based on the projected cost to purchase the same pension scheme income, predominantly based on your health, age, inflation rate and final salary pension entitlement. The money is then used as your retirement income, rather than receiving a pension. The process is also known as a final salary pension transfer.
Transfer incentives
There are incentives to accepting a Cash Equivalent Transfer Value offer, but these benefits will depend on the exact terms and conditions of your current defined benefit pension. Some defined benefit pensions do not offer favourable terms to surviving spouses, partners, and dependants if you die. For example, the amount they receive can be significantly reduced to around 50% - or they may not receive anything. You should consult your pension terms for details.
On the other hand, accepting the Cash Equivalent Transfer Value may provide more financial security to your loved ones in the event of your death. If you have serious health concerns, you may want to consider the Cash Equivalent Transfer Value.
There are other incentives to a Cash Equivalent Transfer Value, which arise from personal situations. For that reason, it’s best to speak directly with a professional financial adviser.
Transfer risks
The biggest risk of opting for a Cash Equivalent Transfer Value is that you lose the prospect of a guaranteed income for the rest of your life. Your future finances may be reduced by leaving the final salary pension scheme.
Once you decide to accept the lump sum and transfer out of the final salary pension, the decision is final. You cannot change your mind and transfer back. Final salary pension transfers are an important decision and it’s advised to consult with a finance professional before making your move.
TRANSFERRING OUT OF A FINAL SALARY SCHEME / DEFINED BENEFIT SCHEME IS UNLIKELY TO BE IN THE BEST INTERESTS OF OR BE SUITABLE FOR MOST PEOPLE.
Pension transfer scams
Pension transfer scams do exist. If you have received a CETV offer, you should confirm the offer is genuine by contacting your pension provider. Do not use the contact details listed on the CETV documentation. Instead, contact your pension provider using their official details, sourced from other letters or online.
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FAQ'S
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On this meeting, we will provide you with and discuss our Terms of Business brochure. This document clearly details our fees for all areas of advice we provide. We understand individuals’ have different needs and objectives and after our consultation we will be able to confirm our fees. At no point will any chargeable work be undertaken until you are made aware of any associated fees. We are always happy to answer any questions about how and when our fees are payable, however we may not be able to confirm the exact fee until we have completed an initial consultation.
Yes, of course. We welcome the opportunity for you to invite family or a third-party representative to come along to our meetings if you would like the presence of a familiar face. We endeavour to support you, so please make us aware of any additional requirements or provision you require prior to our meeting.
We can meet face to face at our offices in Bexley. Our address is Unit 34 The Hop Store, Old Bexley Business Park, 19 Bourne Road, Bexley, Kent, DA5 1LR.
We can also facilitate home meetings if required, or video and phone calls if this is more convenient for you
We provide a range of advice services, including mortgages & protection, investments, financial planning, retirement planning, and estate planning. If you wish to discuss your enquiry further, please feel free to call the team on 01322 958222.
Yes, Sidney Curtis Financial Limited is an appointed representative of Quilter Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) and is registered on the FCA register with Firm Reference Number 440703. Sidney Curtis Financial Limited is also registered on the FCA Register with Firm Reference Number 1052400.
We offer a free no-obligation initial consultation, which will allow us to identify your financial planning needs and to determine what services are most suitable for you.
On this meeting, we will provide you with and discuss our Terms of Business brochure. This document clearly details our fees for all areas of advice we provide. We understand individuals’ have different needs and objectives and after our consultation we will be able to confirm our fees. At no point will any chargeable work be undertaken until you are made aware of any associated fees. We are always happy to answer any questions about how and when our fees are payable, however we may not be able to confirm the exact fee until we have completed an initial consultation.
Yes, of course. We welcome the opportunity for you to invite family or a third-party representative to come along to our meetings if you would like the presence of a familiar face. We endeavour to support you, so please make us aware of any additional requirements or provision you require prior to our meeting.
We can meet face to face at our offices in Bexley. Our address is Unit 34 The Hop Store, Old Bexley Business Park, 19 Bourne Road, Bexley, Kent, DA5 1LR.
We can also facilitate home meetings if required, or video and phone calls if this is more convenient for you
We provide a range of advice services, including mortgages & protection, investments, financial planning, retirement planning, and estate planning. If you wish to discuss your enquiry further, please feel free to call the team on 01322 958222.
Yes, Sidney Curtis Financial Limited is an appointed representative of Quilter Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) and is registered on the FCA register with Firm Reference Number 440703. Sidney Curtis Financial Limited is also registered on the FCA Register with Firm Reference Number 1052400.