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Brexit is leading to “eye-watering” UK final salary scheme transfer values driving more transfers – but for how much longer

For decades people in the UK have been told that final salary (or defined benefits) pensions are ‘gold plated’ and the perception has been established that defined benefit pensions should never be transferred. This has always been the opinion of the Financial Conduct Authority of the UK and of course the schemes managing these pensions, with an advance payout of 20 to 30 years of a members pension reducing the schemes overall pension pot with each and every transfer out.
In recent times though these ‘gold plated’ schemes have come under the microscope as they simply do not have enough money to meet the payments that they are required to make. In fact the shortfall is estimated by various authorities to run somewhere between £400bn and £800bn. However, many of the schemes, despite being in a shortfall are still offering full transfer out valuations.
It was interesting to note that former UK Pensions Minister, Steve Webb waded into the debate and suggested that more people should be transferring out as “transfer values were currently at eye-watering levels”. This is in response to the Work and Pension Select Committee looking at the possibility of allowing UK companies in crisis to reduce the benefits their schemes pay members in order to prevent them falling into the Pension Protection Fund (PPF). To show just how eye-watering some of the valuations have become we compare the transfer valuations of schemes with the level of yearly pension that they are promising in the table below.

Industry UK Annual Pension Transfer Value
Financial Services £12,627.00 £403,663.00 32 times the annual pension
Oil and Gas £2,487.00 £73,725.00 30 times the annual pension
Fast moving consumer goods £1,877.00 £47,514.00 25 times the annual pension

Post Brexit bond yields, crucial for determining transfer values for defined benefit and final salary schemes, have dropped. Whilst small, this bond yield drop has in percentage terms led to large increases in transfer values (in many cases up to 20-30% increases from pre-Brexit rates). Many people are now looking at the larger pot of money on offer and thinking that’s attractive (especially if they don’t have to convert into New Zealand dollar funds on transfer). However, that still needs to be weighed up against the benefits that are being foregone with a defined benefit or final salary transfer and only comprehensive expert analysis can show that.
So, Brexit has not been all bad news.

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very stress free

Thank you Cambel for your help and guidance throughout this process in getting my pension transferred (very stress free for me). It is greatly appreciated and I would certainly recommend you and Charter Square to others who are interested in transferring their pension.

David R, New Zealand

You guys rock!

I just wanted to say a great big thank you to you and your team. You are all totally awesome. I received a cheque yesterday from the Prudential to apologise for the ‘recent inconvenience’ that I had experienced. Thank you for doing this for me. You guys rock!

Noelle B, New Zealand

professional, insightful

Charter Square were professional, insightful and a pleasure to work with. They rose to the challenge of consolidating my overseas pensions and bringing them home with minimum fuss for me and maximum effort on their part.

Jens H, New Zealand

thorough, professional and prompt

Very thorough, professional and prompt service from the team at Charter Square. Thanks for making the bewildering world of pension transfers super simple.

Jules T, New Zealand

Best party to deal with

Thank you kindly for keeping in touch with me. For now, I will not be moving my pension. I will however be keeping your details and referring back to you when I wish to pursue. You by far are the best party to deal with, no nonsense, professional and in my opinion genuine. I do sincerely thank you for your advice to date.

GE, New Zealand


Securing the freedom to use savings that are actually ours to work with has been stressful in the extreme. While I never planned on giving up there were many times when the current (UK) holder made the whole process seem well beyond my determination and ability. It’s easy to look at the 36 month history of this claim with the benefit of hindsight, but the conclusion is that employing Charter Square in the first instance would have been wise had I been able to anticipate the red-tape that appears to have been deliberately created to stall access.

CP, Auckland
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