Final Salary & Defined Benefit Pension Transfers for Expats
A final salary (defined benefit) pension is fundamentally different from the workplace pensions most people build up today. Instead of a pot of money that rises and falls with investment markets, it promises a guaranteed income for life, usually linked to your salary and years of service, often with valuable extras like inflation protection and a spouse’s pension. Because of what’s given up if that guarantee is exchanged for a transfer value, UK law treats this as one of the most tightly regulated areas of pension advice – and that applies regardless of where in the world you’re now living.
Pension advice is a regulated activity, separate from mortgage broking. Premier Expat Mortgages does not advise on defined benefit pension transfers directly – we introduce enquiries to Just Service Global, an international adviser network, for the specialist regulated advice this area legally requires. Gerard Ward is licensed to advise via the Just Service Global network and licence. Nothing on this page constitutes personal financial advice or a recommendation to transfer or retain any pension.
What Counts as a Safeguarded Benefit
“Safeguarded benefits” covers defined benefit (final salary and career average) pensions, and also certain defined contribution pensions that include a guaranteed annuity rate (GAR) – a contractual right to convert the pot into an annuity at a fixed, often historically generous rate, commonly found in older policies from the 1970s–1990s. If your pension includes either of these features, the same regulatory requirements described below apply. It’s worth checking your scheme documentation carefully – a GAR can be easy to overlook, and giving one up unknowingly can be far more costly than the headline transfer value suggests.
Why Regulated Advice Is a Legal Requirement, Not a Recommendation
Since 2015, UK law has required anyone with safeguarded benefits worth more than £30,000 to take regulated financial advice before a transfer can proceed – the scheme trustees are legally obliged to confirm this advice has been given before they’ll release the funds, under Section 48 of the Pension Schemes Act 2015. That advice must come from a firm holding specific FCA permission to advise on pension transfers and opt-outs, given by an adviser holding the additional Pension Transfer Specialist (PTS) qualification. This applies to the transfer of a UK scheme regardless of where the member currently lives – moving abroad does not remove the requirement, and no adviser without the correct UK FCA permissions can lawfully give this advice, wherever they themselves are based.
Why Expats Need Two Advisers, Not One
This is the part of defined benefit transfer advice that catches a lot of expats out. A UK FCA-authorised Pension Transfer Specialist can assess whether giving up the scheme’s guarantees is in your interests – but they typically aren’t licensed to advise you on where the money goes next once it leaves the scheme, particularly if you’re a non-UK resident. That second piece – recommending and managing the receiving pension, whether a SIPP or QROPS, and the investments held within it – is where your locally licensed adviser comes in. In practice, this means a compliant DB transfer for an expat typically involves the UK Pension Transfer Specialist assessing the transfer itself, working alongside a cross-border adviser – in our clients’ case, via Just Service Global – who handles the wider financial planning and the receiving scheme. Any process that skips the UK specialist stage for a transfer above £30,000, however it’s described, isn’t compliant.
Weighing Up a Transfer
The regulator’s starting position is that a transfer out of a defined benefit scheme is not usually in the member’s best interests, because replicating a guaranteed, inflation-linked income for life is genuinely difficult to do through investment returns alone. That said, there are circumstances where a transfer can make sense – poor health and reduced life expectancy, no dependants who would benefit from a spouse’s pension, a strong wider financial position that reduces reliance on the guaranteed income, concerns about the scheme’s long-term funding, or wanting flexibility the scheme doesn’t offer, such as a larger tax-free lump sum or the ability to pass unused funds to beneficiaries more efficiently on death. A proper advice process weighs the specific numbers – your Cash Equivalent Transfer Value (CETV), the income being given up, and the rate of investment return that would be needed to replicate it – against your actual circumstances, rather than treating this as a generic decision.
Requesting a CETV and What Happens Next
The process starts with requesting a Cash Equivalent Transfer Value from your scheme’s trustees – the lump sum they’d pay in exchange for extinguishing your right to the guaranteed income. Most schemes provide one free guaranteed quote every twelve months; quotes outside that window may carry a fee. The CETV is typically guaranteed for three months, which sets a real deadline for completing the advice process and any resulting transfer. From there: a full fact-find covering your scheme details, health, dependants, other assets, income needs and retirement plans; a formal comparison, as required under FCA rules, between what the scheme would likely pay versus what a transfer could realistically achieve; and a written recommendation – to transfer or to remain – that the scheme administrator can act on.
What This Advice Typically Costs
DB transfer advice is priced differently across the market – some firms charge a flat fee regardless of outcome, others charge a percentage of the CETV, and the FCA has expressed concern about percentage-based models because they can create an incentive to recommend transferring. Combined UK specialist and cross-border adviser fees for a full DB transfer typically run into several thousand pounds given the number of parties and the depth of analysis involved. This should always be set out clearly, in writing, before any advice work begins – ask for the fee structure upfront and understand what happens if the recommendation is to stay put.
Our Role
Because this advice sits under specific FCA permissions that a mortgage brokerage does not hold, Premier Expat Mortgages does not give defined benefit transfer advice directly. Where an expat client’s circumstances involve a final salary pension, we introduce the enquiry to Just Service Global. Gerard Ward is licensed to advise via the Just Service Global network and licence, and the advice process that follows – including the UK Pension Transfer Specialist assessment described above – is carried out entirely independently of any mortgage work we do for you.
Related Reading
- Expat Pension Planning – the full overview
- Expat Pension Transfers – the general transfer process for pensions without safeguarded benefits
- QROPS – transferring to an overseas scheme
- Expat SIPP – consolidating into a UK-registered scheme
- UK State Pension for Expats – a separate topic from private pension transfers
Frequently Asked Questions
Do I have to take advice to transfer my final salary pension?
Yes, if the transfer value of your safeguarded benefits is above £30,000 – this is a legal requirement under the Pension Schemes Act 2015, not just good practice.
Does this still apply if I live outside the UK?
Yes. The requirement attaches to the UK scheme and the transfer itself, not to where the member is resident.
Why do I need two advisers?
A UK FCA-authorised Pension Transfer Specialist assesses whether giving up the scheme’s guarantees is in your interests; a separate, locally licensed cross-border adviser handles the receiving scheme and wider financial planning. Both roles are legally distinct.
Will the advice always recommend transferring?
No – a recommendation to retain your existing scheme is entirely valid, and often the more common, outcome.
How long is my CETV valid for?
Typically three months from the date it’s calculated, which sets the timeframe for completing advice and any resulting transfer.
What does this kind of advice typically cost?
Combined fees for the UK specialist and cross-border adviser typically run into several thousand pounds; this is set out clearly before any advice work begins, as part of the introduction to Just Service Global.
Can Premier Expat Mortgages give me this advice directly?
No – this requires specific FCA pension transfer permissions we don’t hold. We introduce these enquiries to Just Service Global, where Gerard Ward is licensed to advise via the Just Service Global network and licence.
Get in touch with details of your final salary pension and we’ll arrange the right introduction for a proper, regulated assessment.
