Defined Benefit Pension Transfer Claims

If you were advised to transfer out of your defined benefit pension or workplace pension into a personal pension or a SIPP, you may have been given poor financial advice.

If you have lost money as a result, you may be able to claim compensation. Find out if Smooth Commercial Law’s expert pension solicitors can help you today.

While they are becoming more and more uncommon, defined benefit pensions and workplace pensions are still regarded as a reliable and shrewd way to plan for retirement. Thousands of UK citizens still have this type of pension, with these schemes bringing guaranteed income in retirement. 

There is, however, a growing trend of financial advisers instructing their clients to transfer out of this sort of pension, on the promise of a higher return on investment. This advice is often unsuitable or misleading.

If you have been left out of pocket due to a transfer out of a defined benefit pension pot, our team can help you claim compensation. Find out today if you are eligible to make a claim with a free initial chat.

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What is a Defined Benefit pension?

A defined benefit pension (DB) is a type of pension where the amount the employee receives is based on how many years they have worked for the employer and the salary they have earned. It is different from other types of pensions as it has certain guarantees on the benefits the scheme member will get out of it, such as a specific amount of money in retirement.

Defined benefit pensions can also be called “Final Salary Pensions” due to the fact that they normally offer the employee an income in retirement that is based on a proportion of their “final salary”, though other factors are taken into account.

Many employer defined benefit schemes have either closed to new or all members over recent years. This sort of pension scheme is, however, still offered by some larger employers.

Defined benefit pension schemes differ to Defined Contribution schemes (DC) in the fact DC pensions pay out different amounts in retirement depending on how much was paid in over time, as well as how well the investments inside the pot grew the pension by.  


Transferring Defined Benefit Pensions

Despite the clear advantage of defined benefit pensions, many scheme members are enticed to transfer their pension pot out of the scheme and into private pension plans. This is often after numerous cold-calls, forceful sales tactics and free “pension reviews” that aim to attract clients to think their “money isn’t working for them”.

Many who are convinced to transfer out of their final salary pension eventually lose money due to investments into high-risk and under-performing Self-Invested Personal Pensions (SIPPs). Smooth Commercial Law has seen a rapid increase in mis-sold SIPPs in recent years, and are fighting every day to get clients the compensation they deserve.

If you did transfer your defined benefit pension, it is likely you transferred it into one of the following:

  • Personal Pension
  • Stakeholder Pension
  • Self-Invested Personal Pension (SIPP)

More pension freedoms were introduced in 2015 which allowed people more flexibility over their pensions, including transferring out of their DB pension pot into an above DC pension pot.

However, those with more than £30,000 in their pension savings are required by law to seek financial advice before doing so. This has meant that transferring out of DB pensions is big business for financial advisers, who will take commission on all transfers. This has led to many financial advisers wrongly advising their clients due to the financial gain they can make. 

Has my workplace pension been mis-sold?

Many people fail to realise that their workplace pension transfer advice was wrong until it is too late. Many see their pension increasing, but miss that it could have been increasing by a lot more had they not transferred. Or, they may have lost money in a negligent transfer of funds.

The Financial Conduct Authority has stated that 50% of the pension transfer cases they were looking at in 2018 were unsuitable. There are a number of reasons this may be the case, and a number of risks involved. Some of these risks include:

  • A loss of guaranteed income from your DB scheme
  • A loss of inflationary protections offered by the DB scheme
  • Having to pay investment managers to manage money, long-term
  • A risk of less income in retirement, particularly if the value of the DC pension pot falls

Some key questions that your financial adviser should have asked before transferring your pension are:

  • Will the new pension be more expensive than the existing one?
  • Is it a good idea to transfer all your pension pots into one?
  • Will you lose any benefits?
  • Are there transfer charges?
  • Is this the right amount of risk you are willing to take?
  • Will you need ongoing financial advice?

If your financial adviser did not guide you through these questions, you may have been mis-sold.

Coupled with the fact that SIPPs are more appropriate for high net worth investors who are accustomed to high-risk investments, you may have been unsuitable for any transfer at all. If you felt pressured by a financial adviser to switch your final salary pension into a SIPP which is now not performing as promised, you may have a claim for compensation. 


How can I claim compensation if I have received poor advice?

If you have received negligent financial advice in relation to your defined benefit/final salary pension, you may be eligible to receive compensation from the Financial Services Compensation Scheme (FSCS). If the company you received advice from is no longer in business, the FSCS can compensate you up to £85,000 for any loss you have incurred.

The FCA and the FSCS are cracking down on poor defined benefit transfer advice, with the FCA launching over 30 enforcement investigations into financial firms who have given poor transfer advice to customers.

The FSCS is a statutory deposit insurance and investor compensation scheme. It can compensate clients if a financial firm is unable to. It has often been described as a “lifeboat” fun.

It is independent of the government and the financial industry, and was set up under the Financial Services and Markets Act 2000, becoming operational on 1 December 2001. They do not charge individual consumers for using our service.

Smooth Commercial Law have an extensive working knowledge of the FSCS and the process to achieve a successful outcome for clients having submitted a significant numbers of claims. The FSCS have protected more than 4.5m people and paid out £26bn in compensation. 

Types of Defined Benefit Pensions that may be affected

Below is a list of the employers and schemes that offered or offer final salary pensions. If you have been told to transfer out of any of these pension pots, you may be entitled to claim.

  • Armed Forces Pensions
  • BAE Systems Pensions
  • Barclays Pension Scheme
  • British Airways Pension
  • British Steel Pension Scheme
  • BP Pension Scheme
  • BT Pension Scheme
  • Dolphin Pension Trust Claims
  • Electricity Supply Pension Scheme
  • Greater Manchester Pension Fund
  • Jaguar Land Rover Pension
  • Local Authority Pension Scheme
  • Marks & Spencers Pensions
  • Merseyside Pension Fund
  • Mineworkers Pension Scheme
  • Nestle Pension Fund
  • NHS Pension Transfers
  • Police Pension Schemes
  • Railway Pensions
  • Royal Mail / Post Office Pension Scheme
  • Strathclyde Pension Fund
  • Teacher’s Pension
  • Tobacco Company Pension
  • Transport For London
  • Universities Superannuation Scheme
  • West Midlands Metropolitan Pension
  • West Yorkshire Pension Fund


How can Smooth Commercial law help?

Do you believe you have been the victim of a mis-sold defined benefit pension transfer? At Smooth Commercial Law our defined benefit lawyers are experts in pension mis-selling and can help you make a claim against your financial adviser if you feel you were not given the right advice or the risks of your investment were not properly explained to you.

We have successfully represented many individuals who have been badly advised and mis-sold a pension, helping them to get their pension back and recover the maximum compensation they rightly deserve.

We will be on hand to advise, guide and support you through each critical step of the claims process, ensuring you are kept fully informed and up-to-date on the progress of your claim. This will enable us to progress your claim with speed and efficiency so that all time frames and deadlines that apply to your case are met with ease and confidence. We will collect and collate all the supporting evidence needed to add strength and weight to your case, increasing your chance of getting the optimum level of compensation you deserve.

We have years of experience helping clients claim against their financial advisers for mis-sold pension claims. Smooth Commercial Law also operate on a No Win, No Fee basis, meaning there is no financial risk to you if you do choose to claim through us.

Should you have a claim for negligent financial advice, we can deal with your case and look to recover compensation for not just your loss of investment but also any adverse tax liabilities that you may now be facing as well.

You can contact our experienced team by calling 0800 046 9976 or by emailing

Key Links

Defined Benefit Pension Transfer complaints up 44 percent

Nearly half of British Steel Pension Transfers were unsuitable

Ex-IFA now targeting pension transfer claims