Reading a Defined Benefit transfer warning without panic

A Cash Equivalent Transfer Value can look large beside a projected annual pension. That gap alone does not mean a transfer is wise; it often reflects the insurer’s view of long-term liabilities and gilt yields at a point in time.

Safeguarded benefits such as spouse pensions, inflation linkage, and early retirement factors rarely reappear in a personal pension on equal terms. Losing those features is the real cost to price, not merely the size of the CETV.

If you are approached with a transfer recommendation that leans heavily on investment projections, ask for the assumptions in writing. Inflated growth rates make almost any transfer look attractive until markets move the other way.

Hartwell will only discuss a DB transfer where we can show the income you would give up against the income a drawdown arrangement might reasonably deliver under cautious assumptions.