Latest News latest news

Digital Focus Online

Think carefully before transferring or opting out of your pension scheme

We are aware that there has been an increase in BAA Pension Scheme members seeking advice to transfer or opt-out of the scheme. If you're struggling with the cost of living, or worried about the future, you may be tempted to change your pension arrangements. But before you do, take your time to understand the risks.

Your current defined benefit (DB), or final salary scheme, provides a guaranteed lifetime income. In most cases, transferring out of a DB pension to a defined contribution or personal pension is unlikely to be in your best long-term interests. If you transfer out you will also give up the protection that the Pension Protection Fund offers in case your employer goes out of business.

If you are considering transferring out, you should first seek free and impartial guidance on your options from MoneyHelper. Experts from MoneyHelper will be attending the Central Terminal Area next month should you wish to get further information - further details will be shared soon.

If you are still considering transferring out of the scheme you should seek financial advice. You should check if the adviser is on the Financial Services Register and their services include ‘advising on pension transfers and pension opt-outs'. Find information on what to expect when seeking advice.

Be on your guard if anyone approaches you directly offering transfer advice as pension scams can be convincing and hard to spot. Visit ScamSmart to find out how to spot and avoid pension scams.

It can be very challenging to reverse a transfer and is not always possible, so whatever you do, take your time, make sure you have independent and reliable advice, and that the decision is right for you.