Pensions!

have a choice of defined benefit or defined contribution schemes.

Very rare to have a choice - not many places offer defined benefit anymore (except maybe civil service etc).

And all the final salary schemes seem to be moving to career average earnings etc.

Also I have an existing pension I’ve been paying into with my previous employer for 12 years. My gut feeling is I would probably loose out if I tried to move it?

Depends where you move it to. Normally you'd just move it to another defined contribution scheme or SIPP and very little would change.

You might be able to trade in the lump sum into the defined benefit scheme and buy more years service - but that would depend on the scheme and would need careful consideration etc.

Take the DB
Leave the existing pension where it is
Ianafa

DB. It’s valued at 20x annual accrual (often 1/80th to 1/60th of final salary) for reference and tax purposes. That makes the value about a quarter to a third of your annual salary. Now see if the annual DC contribution is a third of your salary to compare and you’ll see why DB schemes are closing!

Leave the previous DC where it is

IANAFA

Take the DB

You'd still want to see the terms first. I very much doubt it a straight trade off between 1/60th final salary per year's service vs we'll bung a few quid in a tracker for you each year....

Cheers all, yes Civil service so I *think* it’s a good defined benefit and I assume won’t go bust!

Cheers all, yes Civil service so I *think* it’s a good defined benefit and I assume won’t go bust!

Almost certainly a generous scheme, although I'd guess less generous than 10 years ago etc.

FFS. You need to give some figures.
What is the DB?
Ie is it sixtieths or eightieths?
Or perhaps even one of the treasured British Gas style fortieths:-)
Is it final salary or average?

Or is it a straight hundred quid, no questions asked...

needs numbers but the conclusion will most likely be take the DB. You might be able to use DC scheme to buy years in the DB scheme but even if the option exists that would be even more dependent on the terms - my gut feel is you will want to retain it as a separate pot.

I know many who transferred out of DB schemes in recent years - albeit on a very good CETV - that are regretting that now.

I would take the DB scheme and maybe have a SIPP on the side, the DB scheme will give you financial certainty.

@dantsw13, apparently CETV's have fallen by 50% !!

Take the DB
Leave the existing pension where it is

+1

Nothing can get close to the 'benefits' of a DB, especially not a Govt backed one.

I've 8 separate schemes (DB's and DC's) from previous employers, all kept separate.

I’m lucky that I will have a military DB pension from 60, and a good company DC scheme with about 30 years accrual at 20% salary combined contributions. I joined my current company 2 years after its DB scheme closed to new entrants. The last 2-3 years have demonstrated why DB schemes are so good for individuals, and why companies hate them. My pot is 22% down from its peak. A DB scheme won’t have changed at all.

The ridiculous CETVs of recent years were driven by historically low interest rates & bond yields.

As above. (Need numbers and full range of benefits to check but db much likely to be better. - less risk, known numbers to work with, no fear of market crashes at the wrong time etc etc, probably/possibly has built in dependant benefits)

Ignore the next bit if the existing pension is DB. You should be able to transfer the previous pension pot, ask the pension company and check on exit etc charges plus any other benefits that go with it (that will loose if you transfer it). Firstly I’d check what the fund was and compare its charges and returns with market averages and take it from there. (Note that you can self invest without paying commission and that paying commission is no guarantee of fund performance)

If you’re aged 50 plus read upon pensionwise, https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise?gclid=Cj0KCQiAgribBhDkARIsAASA5bvZtmy7ffSAipDL9750pfv6wqj5TQqLr5j8jcaG7fXWIEzjeJjl54oaAieXEALw_wcB&gclsrc=aw.ds and if you’re not 50 make sure you remember pensionwise when you are 50.

Coincidentally, I sat in a CS pre-retirement course this week and it was the first I'd heard of the existence of a DC scheme. AIUI, the DC scheme doesn't attract employer contributions (but check this!) so I can't imagine circumstances in which it would be better than the career average option. Also worth bearing in mind that accrued benefits in a career average scheme are inflation-protected, while salary certainly isn't (27% reduction in real terms for me since 2010), which is worth taking into account if you can buy added pension.

AIUI, the DC scheme doesn’t attract employer contributions

They have to by law! Although you can opt out.

https://www.gov.uk/workplace-pensions/what-you-your-employer-and-the-government-pay

lso worth bearing in mind that accrued benefits in a career average scheme are inflation-protected, while salary certainly isn’t (27% reduction in real terms for me since 2010), which is worth taking into account if you can buy added pension.

That doesn't make sense. Older, more generous, DB schemes were based on final salary which may or not match inflation during your career. Career average is a downgrade where take an average salary over your career and uses that for scaling against the pension. Both subject to inflation matching pay rises etc during your career.

Perhaps I'm not making myself clear: say I earn enough this year to accrue £1000 in my pension. I don't get a pay increase this year, but inflation is running at 10%. Next year, my £1k from this year has been index linked so is now worth £1100. Any earlier accrued benefits also increase in value. In a final salary scheme, the value of previous years' accrued benefits moves with the real-terms value of your current salary. As my salary eroded, the whole of my final salary pension reduces in value, but in the career Avg pension the value of earlier years' service is maintained.
Which is better depends on the individual. I'm as senior as I want to be, and salaries are falling, so the career Avg pension works well. If I was expecting further promotions and big rises then a FS model might work better.

Might be worth double checking the wording of the offer - it could be that you have a DB pension as a matter of course, but you can opt to pay into a DC pension also if you want to make overpayments.

Some instances this can be very beneficial - with a DB pension you don't as a matter of course get a lump sum without selling some years of the scheme. With my DB scheme, any overpayment ( and associated capital growth) I make into the DC scheme can be taken as a tax free  lump upon retirement provided that DC element is <1/3 of the sum of the total value of DC & DB pots.

In a final salary scheme, the value of previous years’ accrued benefits moves with the real-terms value of your current salary. As my salary eroded, the whole of my final salary pension reduces in value, but in the career Avg pension the value of earlier years’ service is maintained.

Still doesn't sound right.

No two scheme are the same, so it all depends on the exact T&Scs but...

Inflation will erode your final salary and your career average salary at the same rate. As its likely your final salary is higher than your career average, you'd still be better off with the final salary version....