What this calculator does
Our DB transfer value calculator explains how a defined benefit (final salary) pension scheme arrives at a cash equivalent transfer value (CETV), and how to think about whether that lump sum is good value against the guaranteed income you'd be giving up. It walks through the maths with a worked example so you can see what's really being compared before making one of the most significant, and hardest to reverse, decisions in retirement planning.
This gives a rough, ballpark range only. It is not your real Cash Equivalent Transfer Value (CETV) and cannot be used to make a transfer decision.
This is not financial advice and not a real transfer quote. Actual CETVs are calculated by the scheme actuary using your specific age, scheme rules, gilt yields on the calculation date, and other individual factors — they can be significantly higher or lower than this illustration. The FCA's starting position is that a DB transfer is unlikely to be in most people's best interests, and by law you cannot transfer safeguarded benefits worth over £30,000 without a positive recommendation from a qualified Pension Transfer Specialist. Regulated advice for a transfer of this kind typically costs £1,500–£5,000. Request your real CETV from your scheme administrator, and speak to a regulated adviser, before considering any transfer.
If you have a defined benefit pension, it promises you a specific income for life, usually linked to your salary and years of service, regardless of how investment markets perform. A cash equivalent transfer value (CETV) is the lump sum the scheme calculates as being roughly equivalent, in the scheme actuary's judgement, to the value of giving up that guaranteed income. Transferring converts a guaranteed lifetime income into a defined contribution pot that you then invest and draw down yourself, taking on the investment and longevity risk that the scheme previously carried for you.
Transfer values can look startlingly large — multiples of 20, 30, or even 40+ times the annual pension being given up are not unusual, especially when interest rates are low, because low rates increase the theoretical cost of providing a guaranteed income. A big number doesn't automatically mean transferring is a good idea; it reflects how expensive that guarantee is to replace, not necessarily how much better off you'd be.
There's no simple formula that tells you definitively whether to transfer, but a useful starting framework is the "transfer value multiple":
Divide the CETV by your annual DB pension income at retirement to get the multiple (CETV ÷ annual pension).
Compare that multiple to typical annuity rates for someone your age — if the multiple is notably higher than what an annuity would cost to replace the same income, the transfer value may look comparatively generous (though this alone doesn't mean transferring suits you).
Weigh the guaranteed benefits you'd give up: often inflation-linking, a spouse's pension after death, and a guaranteed income for as long as you live, however long that turns out to be.
Consider your own circumstances: health, other income sources, appetite for investment risk, and whether flexibility (for example, to pass on unused funds to family) matters more to you than certainty.
This is a framework for understanding the trade-off, not a recommendation to transfer or stay. By law, anyone with a transfer value over £30,000 must take regulated financial advice before a UK scheme can proceed with the transfer, precisely because the decision is complex and largely irreversible.
Consider Robert, aged 58, with a DB pension promising £12,000 a year from age 65, with annual inflation-linking and a 50% spouse's pension. His scheme offers a CETV of £340,000.
In this example, the transfer value multiple of 28.3x is broadly in line with, or slightly above, what it might cost to buy a similar guaranteed inflation-linked joint-life income on the open market — meaning the offer isn't obviously overly generous or stingy, purely on this measure. Robert would still need to weigh whether he wants the flexibility and investment potential of a transferred pot, against keeping a guarantee that doesn't depend on markets or his own investment decisions for the rest of his life.
A high transfer value multiple can make transferring look attractive on paper, but the right decision depends far more on your personal circumstances than on the multiple alone. If you have other secure income (a spouse's DB pension, rental income, substantial other savings), you may be better placed to take on the investment risk that comes with a transfer. If the DB pension would be your main or only guaranteed income in retirement, keeping it usually provides valuable security that's very expensive, if not impossible, to fully replicate elsewhere. Because of how consequential and irreversible this decision is, regulated financial advice isn't just a legal requirement above £30,000 — it's genuinely valuable regardless of the transfer value size.
Focusing only on the size of the lump sum, without properly valuing the inflation-linking and spouse's pension being given up.
Assuming a transfer decision can be undone later — once transferred out of most DB schemes, you cannot transfer back in.
Underestimating how long the money needs to last, especially if you or your spouse could live well into your nineties.
Overestimating investment growth after transferring, without factoring in charges, market falls, and sequencing risk in early retirement.
Not getting independent regulated advice, or treating the required advice as a box-ticking exercise rather than a genuine second opinion.
Being rushed or pressured into a decision — transfer values are only guaranteed for a limited period, but that shouldn't be used as pressure to skip proper advice.
Yes, it's a legal requirement in the UK for any transfer value over £30,000 — your scheme cannot process the transfer without confirmation that you've received regulated advice.
Almost never. DB transfers are generally irreversible, which is exactly why the decision deserves careful, unhurried consideration.
Transfer values move with factors like interest rates, bond yields, and life expectancy assumptions, so the same pension entitlement can produce a very different CETV from one year to the next.
Not necessarily. A higher multiple can reflect the cost of replacing valuable guarantees, but the right decision depends on your personal circumstances, health, and attitude to risk, not the multiple in isolation.
In a DB scheme, a spouse's pension is usually built into the guarantee automatically. After transferring, any provision for a spouse depends entirely on how you structure and manage the transferred pot yourself.
Want the full framework for this decision? Read our guide: Should you transfer your defined benefit pension?
Be alert: unsolicited calls or messages offering to help you transfer or "release" your DB pension are a common scam tactic. Legitimate advisers don't cold-call. Learn the warning signs: Cold-call pension transfer scams explained.
Please remember: the figures shown are illustrative and for general guidance only, not personalised financial advice. This decision is complex and largely irreversible — always take regulated financial advice, and you can check an adviser's credentials or get general guidance from MoneyHelper (moneyhelper.org.uk) or GOV.UK.
One of the most confusing aspects of transfer values is that the same DB pension promise can generate a very different CETV within just a year or two, without anything about your personal pension entitlement changing at all. The explanation lies in how schemes calculate the value: they estimate the lump sum needed today, invested at expected future returns, to fund your promised income for the rest of your (and potentially your spouse's) life. When long-term interest rates and bond yields fall, that estimate rises, because a lower assumed investment return means a bigger upfront sum is needed to generate the same future income. When rates rise, the opposite happens, and transfer values tend to fall.
This is exactly why transfer values were unusually high during the low interest rate years of the 2010s and early 2020s, and why they fell noticeably as interest rates rose afterwards. It means the timing of when you request a transfer value can matter significantly to the number you're offered, even though your underlying DB entitlement hasn't changed at all. It also means a transfer value you were quoted some years ago is not a reliable guide to what you'd be offered today — always request a current, up-to-date figure before making any decision, since offers are typically only guaranteed for a period of around three months.
Life expectancy assumptions used by the scheme actuary also affect the figure: if a scheme updates its assumptions to reflect people living longer, that too can push transfer values higher, since the guaranteed income is expected to be paid for longer on average.
Transfer values are recalculated using current interest rates, bond yields, and life expectancy assumptions at the time of the request, so even a small movement in these factors can produce a noticeably different figure from one year to the next.
Transfer value quotations are typically guaranteed for around three months from the date of calculation, after which the scheme will usually need to recalculate the figure if you want to proceed.