Site Logo
Site Logo

With the market in decline should I cash out my final salary pension?

By Mike Narouei, Content Producer at Boring Money

23 Mar, 2020

In a new series, Holly provides straightforward answers to your difficult questions.

Email your questions to:

- "With the market decline due to Covid 19 is now a good time to cash out my final salary pension for a higher CETV ratio?"

We checked in with pensions expert Tom McPhail on this one- final salary schemes are always tricky so it’s good to get some expert help.

Here’s what he had to say:

- "In theory an investor could take advantage of inflated DB transfer values to switch out of their guaranteed scheme and to invest in a money purchase arrangement, buying in to shares at bargain basement values.
- Current Gilt yields may drive up liability calculations so we could see generous transfer values emerging over the weeks to come. However we may also see trustees acting to cut back transfer values in response to the current market volatility. It is also worth noting final salary transfers take weeks or months to execute and who knows what the state of the world will be by the time it actually completes.
- Right now many money purchase investors are facing the prospect of a cut to their retirement income as a result of falling asset values and suspended dividend payments. In this context, the security of a guaranteed final salary pension income looks pretty appealing so members should think long and hard before trying to cash in and jump into the market."


New question answered daily

  • Send your question to

  • Holly will pick a new question to answer every day

  • Answers posted on our site, and on Instagram and Facebook