General information guide. Not financial or legal advice. For a free case assessment, use the button below.
Start your free assessment → Download this guide (PDF) ↓A defined benefit (DB) pension — also called a final salary pension — pays you a guaranteed income for life in retirement, calculated based on your salary and years of service. Common examples include NHS pensions, teachers' pensions, local government pensions (LGPS), armed forces pensions, civil service pensions, and older company schemes.
DB pensions are highly valuable because the income is guaranteed regardless of investment performance or how long you live. Once you transfer out of a DB pension, you permanently give up those guaranteed rights.
DB transfer mis-selling occurs when a financial adviser recommends you transfer out of a DB pension without having adequate reasons to do so — failing what the FCA calls the "compelling reasons test" under COBS 19.1.6.
Common forms of mis-selling include: failing to properly calculate the critical yield; not assessing your capacity for loss; not explaining the guaranteed benefits you were giving up; recommending transfer primarily to generate adviser commission; or arranging the transfer via an unregulated introducer.
Every FCA-authorised adviser giving DB transfer advice must start from the assumption that transfer is unsuitable. The adviser may only recommend transfer where it can clearly demonstrate, on contemporary evidence, compelling reasons why transfer is in the specific client's best interests. The FOS upholds 55–77% of DB transfer complaints nationally because advisers frequently failed this test.
The critical yield is the annual investment return your SIPP would need to achieve to match what your DB pension would have paid in retirement. A critical yield above 7% is extremely difficult to achieve sustainably. Where an adviser recommended transfer with a high critical yield without adequately explaining the implications, the advice was likely unsuitable.
DB transfer claims can be brought through the FOS (if the firm is still trading), the FSCS (if the firm has failed), or civil court proceedings under FSMA s.27 (if an unregulated introducer was involved). Time limits apply — obtain a formal assessment immediately.
You can complain directly to the firm, refer to the Financial Ombudsman Service or apply to the FSCS — all completely free. If you use the free routes, you keep 100% of any compensation.
| Redress received | Max % | Max fee |
|---|---|---|
| Up to £1,499 | 30% | £420 |
| £1,500–£9,999 | 28% | £2,500 |
| £10,000–£24,999 | 25% | £5,000 |
| £25,000–£49,999 | 20% | £7,500 |
| £50,000 and above | 15% | £10,000 |
Compensation is paid directly to you. We invoice after you receive your compensation. You pay nothing if unsuccessful. Source: FCA PS21/18 (Chapter 2, Table 1) & CMCOB 5.2. Excl. VAT.
Compensation is paid directly to you. We invoice after you receive your compensation. You pay nothing if unsuccessful. Source: FCA PS21/18 (Chapter 2, Table 1) and CMCOB 5.2. Excl. VAT.
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Contact complaints@redressadvisory.com. If unresolved, refer to the Financial Ombudsman Service free of charge within 6 months of our final response.