Final Salary Pension Advisers

Final Salary Pensions

What are Final Salary pensions?

A Final Salary pension (officially known as a defined benefit pension) is a pension scheme that promises to pay you a guaranteed pension from the day you retire, for the remainder of your life. The amount you are paid is based on your final salary; at the point you retire – which is why they are often called Final Salary pensions. The amount you receive year on year often increases in line with inflation, and there will most likely be a dependant’s pension payable on your death.

Are there different types of Final Salary Pension?

Yes, there are two main types of Final Salary pension.

  1. The first is ‘Final Salary’ schemes. These are based on the amount that you are paid as a salary when you retire.
  2. The second is known as ‘career average’ schemes. Career average schemes are based on your average salary throughout your career with the company.

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