Advising on Defined Benefit (DB) pensions is one of the most complex and highly regulated areas of financial planning. Decisions relating to a DB pension are often irreversible, legislation changes regularly, and many firms no longer provide advice in this area.
We believe that high‑quality DB pension advice remains a vital part of financial planning. For many individuals, a DB pension represents the largest and most secure source of retirement income, and the decisions made can have a significant impact on long‑term financial security for both you and your family.
Our role is to help you understand your options, assess the implications of each decision, and provide clear, suitable and proportionate advice, tailored to your personal circumstances.
Our approach to Defined Benefit advice
Regulation requires advisers to start from the assumption that retaining a Defined Benefit pension is likely to be in most people’s best interests. Our advice process is designed to reflect this principle.
Rather than focusing immediately on pension transfers, we begin by helping you understand:
- how your pension should be taken, and
- when it should be taken.
Only where appropriate do we then consider whether transferring your pension should be explored further.
We use a stepped advice process, with clear exit points at each stage. You only proceed — and only pay — for the work that is genuinely required.
All fees are agreed in advance and charged on a fixed‑fee basis. Fees are payable regardless of the outcome of our advice, and we do not charge a percentage of your pension value.
Important – the risks of transferring a Defined Benefit pension
Transferring a Defined Benefit pension means giving up a guaranteed, inflation‑linked income for life, and this is why the regulator expects most people to be better advised to remain in their scheme.
If you transfer, you may:
- give up the certainty of a guaranteed income for you (and potentially your dependants) for life
- lose inflationary protections built into the scheme
- pay additional charges (such as adviser, platform and investment management costs), typically deducted from the transferred pension fund
- take on investment risk and experience falls in the value of your pension fund
- receive less income than expected, or in some cases run out of money later in life
These risks are central to our advice and are considered carefully before any transfer recommendation is made.
Our Defined Benefit Advice Steps
Step 1 – Education and preparation
Understanding your Defined Benefit pension
Before any personalised advice begins, we ensure you are in an informed position.
This includes access to educational material and an educational video designed to help you understand:
- how Defined Benefit pensions work
- the decisions typically faced at retirement
- which decisions are irreversible
- the risks associated with transferring safeguarded benefits
- how our advice process works and where it may end
A common source of confusion: “benefits at date of leaving”
Many Defined Benefit pension statements show benefits “at the date of leaving” alongside a Cash Equivalent Transfer Value (CETV). This can be misleading if taken at face value.
For example:
A statement may show a pension of £12,000 a year at date of leaving, based on earnings when the member left the scheme 10 years ago.
That figure is usually revalued each year between the date of leaving and retirement, often in line with inflation (subject to scheme rules and caps).
After inflation revaluation, that £12,000 might already be worth £16,000–£17,000 a year in today’s terms.
If the Normal Retirement Date is still another 10 years away, the pension payable at retirement could be materially higher again, depending on future inflation and scheme rules.
This is why the “date of leaving” figure on a statement is not
what most members will actually receive at retirement, and why careful analysis is required before drawing conclusions or comparing figures.
Charge: No cost
Outcome:
You decide whether you wish to proceed to personalised advice.
Planning & Discovery
Establishing the right planning context
Before providing personalised Defined Benefit advice, we must have a sufficient understanding of your objectives, financial position and retirement priorities.
When Discovery applies
- If you are already a client of Harding Financial and we hold up-to-date Know Your Client information, no separate Discovery stage is required.
- If you are engaging us for Defined Benefit advice on a standalone basis, a Planning & Discovery stage applies and is completed before personalised DB advice begins.
What Discovery includes
- detailed fact‑finding and objectives
- AML and identity verification
- risk profiling
- baseline cashflow modelling where appropriate
- full policy information
Discovery fee
£2,250 per client or household
If you subsequently engage us for holistic financial planning within three months, this Discovery fee is fully offset against our initial advice and implementation fees, so it is not paid twice.
This credit is not dependent on whether you proceed with any Defined Benefit recommendations or any pension transfer.
Step 2 – How should you take your pension?
Structuring your Defined Benefit benefits
This is the first stage of personalised advice and, for many clients, the only stage required.
Once we have obtained full information from your pension scheme(s), we analyse how your benefits can be taken at your scheme’s Normal Retirement Date.
This typically includes:
- comparing full pension versus maximum tax‑free cash (PCLS)
- assessing income tax implications
- considering inflation assumptions and future income
- reviewing dependant and survivor benefits
- mathematical modelling of cumulative lifetime income
- integrating the analysis into your wider financial position (using existing cashflow modelling where already in place)
This stage does not assess transfer values (CETVs) or model outcomes based on transferring to a defined contribution arrangement.
We provide a formal written recommendation and meet with you to explain our conclusions clearly.
Charge:
- £1,750 for one Defined Benefit pension scheme
- £1,300 for each additional scheme
Outcome:
- proceed with our recommendation and implement your chosen option, or
- conclude the advice process at this stage
Step 3 – When should you take your pension?
Retirement timing and advanced benefit analysis
Where there is a genuine question over whether it may be more suitable to take your pension early, at Normal Retirement Date, or later, we carry out more detailed and technically complex analysis.
This stage is only undertaken where retirement timing is likely to make a material difference to outcomes.
Our work at this stage may include:
- early and late retirement factors
- commutation factors at multiple retirement ages
- lifetime net‑of‑tax comparisons
- inflation‑adjusted modelling
- scenario testing within your cashflow plan
- consideration of health, employment plans and lifestyle objectives
We first assess the options mathematically, and then place the results in the context of your personal circumstances before providing a clear, formal recommendation.
This stage does not assess transfer values (CETVs) or model outcomes based on transferring to a defined contribution arrangement.
Charge:
- £3,000 for one Defined Benefit pension scheme
- £2,400 for each additional scheme
Outcome:
- implement the recommended retirement timing, or
- conclude the advice process
Step 4 – Should a transfer be considered?
Full Defined Benefit transfer advice
Only after completing the earlier stages — and where we believe it is appropriate — do we consider whether transferring a Defined Benefit pension should be explored.
At this stage we obtain an up‑to‑date Cash Equivalent Transfer Value (CETV) and provide full, regulated pension transfer advice. This includes:
- Appropriate Pension Transfer Analysis (APTA)
- Transfer Value Comparator (TVC)
- comparison with retaining the Defined Benefit scheme
- consideration of suitable receiving arrangements
- investment strategy analysis
- assessment of costs, risks and long‑term sustainability
Advice on pension transfers is given or checked by a Pension Transfer Specialist.
Our advice at this stage may still be to retain your Defined Benefit pension. We will only implement a transfer where we have formally recommended that doing so is in your best interests.
Once your CETV is known, we will provide a personalised charges disclosure in writing (in cash terms) and will not begin chargeable transfer analysis until you have agreed to proceed.
Charge:
- £6,500 for one Defined Benefit pension scheme
- £5,250 for each additional scheme
Outcome:
- recommendation to retain, partially transfer or fully transfer
If we recommend that you retain your scheme, we will not proceed with a transfer on an insistent client basis (i.e. against our advice).
Future CETV re‑assessment
If a transfer is not advisable because of an unfavourable transfer value and circumstances remain unchanged, it may be prudent to conduct a limited future reassessment should a new CETV be significantly higher.
This review is designed to:
- - assess whether the new CETV exceeds a level where transfer suitability may warrant reconsideration
- avoid repeating earlier analysis unnecessarily
- determine whether full transfer advice should be revisited
This review does not constitute full transfer advice and does not include a new APTA or TVC unless recommended.
Charge: = £1,250 per scheme
Implementation of recommendations
Where advice leads to action — whether taking benefits or transferring — our experienced administration team will manage the implementation process and keep you informed throughout.
Charge: No additional charge for implementation.
Transparent, client‑focused advice
Our Defined Benefit advice process is designed to:
- - put your long‑term security first
- focus on the decisions that matter most
- avoid unnecessary complexity
- provide clear exit points
- deliver advice that is suitable, proportionate and aligned with regulatory expectations
If you would like to understand your Defined Benefit pension options, we would be happy to help.
Click below to start our process at no cost
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Guildford Office:
The Estate Yard
East Shalford Lane
Guildford
Surrey
GU4 8AE
London Office: c/o The Ministry, 79-81 Borough Rd, London, SE1 1DN