Seven in 10 final salary pension transfers approved, leading FCA to step up crackdown

Seven in 10 defined benefit (DB) or final salary transfer requests are approved by financial advisers, a finding that has drawn strong criticism from the Financial Conduct Authority (FCA).

The FCA said it finds the high proportion of consumers being given the green light to transfer out of the salary-based schemes – which typically offer an index-linked income for life, plus benefits (see below) – as “deeply concerned and disappointing”.

Do you need a helping hand to navigate pension freedoms?

The pension freedoms introduced in April 2015 saw a dramatic change in how we save for and fund our retirement. The key change was around unrestricted access to pension funds, handing individuals the opportunity to put themselves in the pensions driving seat. But navigating these new opportunities is easier said than done: below are two examples that spring to mind.

Make the most of pension tax relief before it is too late

Anyone over 40 is now entitled to a free NHS mind and body health check every five years, at which they might expect to receive the cheerful advice – “use it or lose it”. A wealth adviser or manager looking to keep your finances in top condition might declare the same of your pension.

How to minimise tax at retirement

People could end up paying 200 times more tax, depending on how they decide to access their retirement income, according to research by the Pension Policy Institute (PPI).

The findings were based on the tax that someone would pay if they fully withdrew their defined contrition (DC) pension, compared with annuity purchase.