UK. Savers who transfer pensions are ill-advised in 53pc of cases, says watchdog
Savers trying to swap their “final salary” pensions for cash face a crackdown from the City watchdog following a damning report into the quality of financial advice they are receiving.
Growing numbers of people are swapping final salary pensions for “defined contribution” plans. This involves giving up guaranteed, inflation-proofed income for life, in return for often highly attractive cash offers and greater flexibility over how pensions can be spent. It is thought about 80,000 transfers have taken place this year alone.
Financial advice is required by law when savers transfer final salary benefits worth £30,000 or more, but an investigation by the Financial Conduct Authority (FCA) has found that in many cases the advice is poor.
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