People who attempt to swap final salary company pensions for cash are being left in limbo following a controversial legal judgment. More than a quarter of a million savers have taken advantage of highly generous cash offers to give up membership of these workplace pension schemes in recent years. A pension that promises to pay £30,000 a year might be swapped for £900,000 or more in cash, for instance.
Savers are also attracted by the extra flexibility and tax treatment on death of personal pensions. It is thought that £34.2bn was withdrawn from company schemes in 2017 alone. But future transfers are now under threat in the aftermath of a High Court ruling that will force Lloyds Banking Group to equalise benefits between male and female staff. According to Royal London, the mutual pension firm, some schemes have put a temporary block on transfers following the court case.