Inflated Transfer Offers Tempt Employees
April 11th, 2017
Employers are tempting employees to switch out of their pension schemes by offering huge ‘transfer values’ , sums that can be taken to an independent scheme and invested, in exchange for giving up ‘final salary’ related pension rights, says the Mail. It cites the example of a 62-year-old man who had to choose between a pension of £24,000 a year at age 65 or a sum of £849,000 today.
Before Brexit, transfer values of 20-25 times the expected pension were typical, but now multiples of over 30 are common. These record transfer values are the result of extremely low interest rates and may not last, warn experts.