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Reasons to leave existing pensions where they are: final salary benefits

If any of your old pensions is a final salary or defined benefit type, it will virtually always be best to stick with it – you will almost certainly get a guaranteed risk-free income that rises every year in line with inflation and which is partially transferred to your spouse if you die first.

However, it is often possible to swap final salary benefits for a cash lump sum (the main exceptions are unfunded public sector schemes, which means most except those run by local authorities).

The sums paid can be generous – in some cases in mid-2017, private sector employers were offering 40 times the promised annual pension to those who wanted to leave the scheme – so you may feel that you will be able to generate a higher income from such a sum than you would get under the terms of the pension.

However, you would be giving up the guaranteed income for life. This is an area where advice from an expert (see our article on advice) is probably needed (and is often required by law in any case). At the very least, think extremely carefully before giving up final salary entitlements.

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