DB pension transfer advice cost - what to check first

Start with the warning

A defined benefit pension — often called a final salary or career-average pension — usually promises an income for life. It may rise each year and may keep paying a reduced income to a spouse or dependant after you die.

Transferring almost always converts that promise into a defined contribution pot. From that point, investment performance, charges, withdrawal decisions and how long you live all sit much more heavily on you.

This is why the FCA and The Pensions Regulator both take the view that keeping a defined benefit pension is in most people's best interests — and a transfer cannot be undone once it is made.

So this page is deliberately not framed as "how to get the cheapest transfer advice." The real question comes first:

Is paying for transfer advice appropriate at all, and is the adviser authorised for exactly this service?

When advice is required

If your defined benefit pension is worth more than £30,000, financial advice is a legal requirement before you are allowed to transfer it to a defined contribution scheme.

The figure used to value the pension is normally its cash equivalent transfer value, or CETV. A CETV is usually guaranteed for three months, and the scheme can take up to three months to send it to you.

If your DB pension is worth £30,000 or less, advice may not be legally required in the same way — but the decision is no less important. A smaller guaranteed income can still be extremely valuable when it is secure, inflation-linked, and a load-bearing part of your retirement.

Why advice can cost thousands

DB transfer advice routinely costs thousands of pounds, and that is not surprising given the work involved and the liability the adviser carries.

A proper advice process may need to weigh up:

• scheme benefits and inflation increases;
• spouse, civil partner or dependant benefits;
• the CETV and what it could realistically buy elsewhere;
• your other pensions, savings and income;
• your attitude to investment risk and capacity for loss;
• your tax position and retirement-income needs;
• whether the transfer would improve or weaken your financial security;
• a full regulated suitability report.

Cheap advice is not automatically bad advice — but be sceptical of any route that looks like a rubber stamp.

What abridged advice means

Abridged advice is a shorter, usually cheaper process. It can tell you when a transfer is clearly unsuitable, but it cannot produce a positive recommendation. To recommend a transfer, or to go ahead with one, you need full advice.

In other words, abridged advice works as an early stop sign — not a shortcut to completing a transfer.

Before you pay, ask the adviser to explain:

• whether the quote is for abridged or full advice;
• whether any later full-advice fee is reduced by the abridged fee;
• what happens if the answer is "do not transfer";
• whether you still pay if the transfer is judged unsuitable;
• whether the firm holds the right DB transfer permissions.

What a fee quote should show

Before paying, get the fee basis in writing:

1. The fixed fee or charging formula.
2. Whether VAT applies.
3. What is included: triage, abridged advice, full advice, implementation, ongoing advice.
4. Whether the fee is payable if the recommendation is not to transfer.
5. Whether the adviser receives any other payment from a provider, platform or introducer.
6. Who gives the regulated advice and who checks the pension transfer analysis.
7. The firm's FCA permissions for pension transfer advice.
8. What complaint and compensation routes apply if the advice turns out to be poor.

Avoid any fee structure or sales process that makes it feel as though the adviser is being paid to reach one particular answer.

How to check an adviser

Use the FCA Financial Services Register or FCA Firm Checker before paying anyone. Check:

• the firm's legal name, not just its trading name;
• the individual adviser, if one is named;
• that the firm is actually authorised;
• that it holds permission for pension transfer advice;
• whether there are restrictions, warnings or known clones;
• that the contact details match the FCA record.

If a firm contacts you out of the blue about transferring a DB pension, treat it as a serious warning sign. The FCA's guidance is blunt: do not engage with companies that approach you unprompted to talk about your pension options.

What not to pay for

Do not pay for:

• a guaranteed transfer result;
• advice from a firm you cannot find on the FCA register;
• an overseas or unregulated introducer route;
• a recommendation based only on the transfer value looking large;
• a transfer designed mainly to unlock cash early;
• pressure to sign before a CETV expires;
• advice that ignores spouse benefits, inflation protection or the risk of running out of money.

Official guidance first

Before paying for advice, read:

• FCA: considering a defined benefit pension transfer;
• MoneyHelper: transferring your defined benefit pension;
• FCA Financial Services Register.

Then read this guide alongside:

• Cash equivalent transfer value;
• Should I transfer a final salary pension?;
• Pension scams and cold-contact warnings.

This is factual information, not financial advice. Pension Bible does not recommend transferring a defined benefit pension and does not recommend any DB transfer adviser.