Most people would agree that being a Police Officer in the UK is often a tough job, and as part of the remuneration package over the years has been a good pension.
More specifically, a defined benefits pension – one that promises a guaranteed income in retirement based on the officer’s length of service, their final or average salary, as well as a few discretionary factors.
They also come with great death in service benefits to look after spouses or dependent children should the officer die before drawing on the pension, and all the risks, responsibilities and costs of running the scheme are placed on the shoulders of the pension trustees – easy going!
Yet some people are persuaded to move these valuable pensions in final salary pension transfers.
Not everyone stays a police officer until they retire – chasing crooks and sniffing out crime can take its toll and many people simply fancy a change before they retire, meaning that they leave the force.
But instead of leaving their valuable police pension where it is, many are persuaded to transfer it away on the advice of a financial adviser, often in the hope of making more money in retirement by investing it elsewhere.
For a few officers this may be the right call, but many will have taken negligent financial advice to do so, putting their previously safe retirement fund at risk on an often volatile market, and losing money in the process.
Transfer fees alone can shave a few thousand off during a pension move, and although investments look like they are causing the new pension to grow, they may not be beating the Critical Yield of the old Police pension.
Failing to meet the Critical Yield (the percentage by which the pension must grow by year on year to match the old pension’s benefits) means that although the pension appears to be growing, it may never be worth as much as the old pension.
Add the annual charges former officers may have to pay to the new pension scheme, and the risks of the investment market, a move may have been a bad idea.
If you transferred your Police Pension to a private scheme then you may have been mis-sold, leaving you less well-off in retirement, even if your pot seems to have grown dramatically for the moment.
For those that took financial advice in order to make this happen, there could be a way to get justice with a winning mis-sold pension claim.
If they do feel you may have been mis-sold, we may be able to help you make a claim on a No Win – No Fee* basis, to help you recover some of the losses you will later experience from having transferred your pension.
Book a free initial assessment today by calling 01204 205 061, or using one of the contact forms on the website.Speak with a Claims Handler
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Moving a final salary or other defined benefit pension is rarely advisable, except in certain situations.
While moving your pension may earn your adviser big fees and commissions, you may lose more than you hoped.