"A pension transfer value, sometimes referred to as a cash equivalent transfer value, is the lump sum offered by your pension provider, if you decide to transfer your pension savings to a different scheme."
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Alternatives to Cashing in Pension Transfer Value
If you’re considering cashing in your pension transfer value, it’s important to also evaluate alternative options.
For example, you could leave your pension pot where it is, particularly if you’re in a defined benefit scheme. This provides a guaranteed income for life, which a lump sum cannot offer.
Another option could be to transfer your pension to a different scheme which offers you better benefits. For instance, some workplace pension schemes provide options to increase your guaranteed retirement income through fixed or inflation-linked annuities.
Furthermore, delaying accessing your pension pot can allow your savings to continue to grow tax-free. Remember to carefully review your expected retirement expenses and income streams, allowing you to determine the optimal timing and tax efficiency for withdrawals.
Phased retirement is also a potential solution, allowing you to gradually transition into drawing your pension.
Finally, you could consider taking a portion of your pension pot as a cash lump sum and leaving the rest in the scheme. This would provide you with some upfront cash, as well as still receiving a regular income.
It is essential that you seek advice from the likes of financial advisers before making any decisions about your pension.