Pensions gold rush – experts say there’s NEVER been a better time to cash in

GETTY

Former pensions minister Baroness Ros Altmann says she has cashed in two final-salary pensions

Several FTSE 100 executives, and even the former pensions minister, have also cashed in as financial advisers say hundreds of millions of pounds have been paid in recent months. 

Members of increasingly rare final-salary schemes who are yet to retire have chosen a cash lump sum rather than their future pension.

Thousands are said to have been tempted by cash-transfer offers in the wake of the historic June referendum as bond yields plunged. 

• 

  New calls for state pension payouts to be made available earlier

• 

  Savings and pensions face boost as shares ‘bounce’ to an all-time high

Defined benefits pensions are often described as “gold plated” because they give people a guaranteed level of income in retirement. 

Many have been closed in recent years as companies find them too expensive as people live longer and replaced with defined contribution schemes. 

Baroness Ros Altmann, the former pensions minister said she decided to cash in two of her final-salary pensions after transfer quotes for both doubled. 

GETTY

Transfer values have been offered at up to 50 times the projected annual pension income

The sums were attractive to me and it was hard to imagine the offers going any higher

Baroness Ros Altmann

She told the Financial Times: “The sums were attractive to me and it was hard to imagine the offers going any higher.” 

Transfer values have been offered at up to 50 times the projected annual pension income in some cases netting several million pounds for some high-earners. 

Actuarial firm Hymans Robertson said a dozen long-serving executives in one FTSE 100 company all took the cash, swapping in their future pensions in a transfer totalling £30million. 

GETTY

Steve Webb said workers should be able to trade in gold plated pensions for a lump sum

The rush comes as former pensions minister Steve Webb said workers wanting to trade in gold-plated pensions for cash should be given the opportunity. 

Earlier this month, Mr Webb said those with defined benefit final salary guaranteed incomes should be able to take part as a lump sum, leaving the rest to generate a reduced income. 

Mr Webb, now director of policy at Royal London insurance, said giving workers the chance to “slice and dice” company pension rights would allow greater freedom and security in old age.