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DEFINED BENEFIT PENSION PLAN

 
What is a defined benefit pension plan?

A defined benefit pension plan (often known as a DB pension scheme) is a private workplace pension scheme that is arranged for you by your employer and which is based on your salary and the amount of time that you have worked for your employer. The amount you get in your pension pot is a guaranteed pre-agreed amount.

 

When can you access your pension pot?

When you can access your pension will depend on the rules of the pension scheme that you are part of. Normally, the retirement age is 65, but it sometimes possible to access your pension pot before retiring. The earliest age that you can usually access it is 55, but this can mean that you get a reduced amount.

 

Once you are able to access your pension pot you usually get a tax-free lump sum of 25% and then the rest as regular payments. It provides a secure income for the rest of your life, which increases each year. Alternatively, you may be able to take your entire pension pot as a lump sum, but only 25% will be tax free.

 

What types of defined benefit pension plans are there?

There are two main types of defined benefit pension plans – final salary pension schemes (based on your final salary, i.e. your salary when you retire) and career average pension schemes (based on your average salary over your career).

 

Transferring Defined Benefit Pension Plans

In some situations, you can transfer your defined benefit pension to a defined contribution pension if you’re not already receiving your pension. There are advantages and disadvantages to this, depending on your individual pension plan and circumstances.

 

Neil Gilbourne at 3R Financial Services is a pension transfer specialist and can provide you with independent financial advice regarding your specific and unique circumstances.

 

Contact Us Today

We provide independent financial advice to both individual and business clients, and specialize in providing bespoke financial situations that focus on their specific circumstances and needs. We are dedicated to helping our clients plan for a secure financial future for themselves and their loved ones.

 

Our personal services include Savings & Investments, Retirement Planning, Insurance and Mortgage Solutions.

 

We are a “whole of the market” provider, meaning we can recommend suitable products to our clients from our extensive range of financial services from a wide range of product providers that best meet their needs.

 

To arrange an appointment with one of our pensions experts, just call us on 01636 893155 or send an email to info@3rfinancialservices.com