COMPANY SCHEMES

Defined Benefit Schemes

Final Salary Schemes

Also known as a defined benefit pension, but what is it?

A defined benefit pension can be based on how much you're paid when you finally retire or on an average of your salary across your career. Both types provide valuable benefits, the biggest of which is something called index linking, which means your pension income is guaranteed to rise each year (usually capped at 2.5 per cent a year).

A final salary pension scheme is advantageous because it takes all the investment risk and is obliged to deliver a pre-defined amount of income made to each member, regardless of how underlying investments have performed. Unfortunately, final salary pensions are expensive to provide and the majority of employers have changed to defined contribution schemes.

If you would like to discuss your retirement options in more detail, we offer a free no obligation consultation so please do not hesitate to contact us.