What are the main advantages and disadvantages of transferring my pension to the Civil Service scheme?

I'm 41 years old and have worked in the private sector for the last 17 years and have built up a pension of ~£250k. I am about to start a new career in the civil service and have been given the option to transfer my pension to the Civil Service scheme. Whilst I appreciate individual personal advice cannot be provided on this case I am curious to know what are the main advantages and disadvantages of transferring my pension in this way?

Hi Steven

It's a really good question and clearly a good amount of pension that you'll want to ensure you can maximise.

I'm assuming that you're talking about joining the CARE (Career Average Revalued Earnings) pension, which is by far and away the most common scheme for new civil service entrants.

If so, you can apply for a transfer and they will provide an illustration of benefits that your transferred pension will buy you. You are not obliged at this point to go ahead with the transfer by applying. This way you can understand how many 'years' in the scheme it will build up.

You can find more info here:
https://www.civilservicepensionscheme.org.uk/joining-the-pension-scheme/transfer-an-old-pension-into-your-civil-service-pension/

The main benefits of a CARE scheme for retirement:
1. A guaranteed inflation-linked income
2. The ability for your pension to be worth more in retirement if you progress in your career - as it is based on your average salary
3. Spouse/Partner pension for the remainder of their lives on your death - usually half the starting pension for you

The main benefits of retaining your pension in its current form:
1. The ability for the fund to potentially grow faster than you accrue benefits in the CARE scheme
2. Having a blend of guaranteed pension (in what you will accrue in the CARE scheme) plus this flexible pot you can draw as and when you wish in retirement
3. More flexibility on death benefits for any other family as well as your spouse/partner

There is a lot to consider and you are right in that nobody can give you best advice without it being individual personalised advice by an adviser.

A lot of this ultimately comes down to whether you are cautious - and therefore want more guaranteed inflation-linked income in retirement but with less flexibility, or you are more adventurous - and are prepared to manage your private pension to grow this and take it flexibly alongside a smaller guaranteed inflation linked pension.

Happy to chat further if it would help, otherwise I'm sure you'll make the right choice

All the best

Jamie