If you still have pension benefits with a previous employer’s pension scheme when you are reaching your desired retirement age you must seek advice immediately.

Some advisers might tell you that if you are close to retirement age it is too late for a transfer to a personal pension to benefit your retirement income. This is almost invariably wrong.

If you leave your benefits in your previous employer’s scheme you will receive a stated level of tax free cash and annual pension. The pension promise will almost invariably include a promise to pay a pension to a surviving spouse. But what if you aren’t married? This promise costs the scheme a lot of money to provide and will usually mean you are given a higher transfer value to move to a personal pension…possibly to buy yourself a higher level of pension for yourself, even though that pension might then cease on your death.

The scheme will also usually grant you a pension which increases every year after the payments start. This ‘escalation’ costs the scheme a lot of money and, again, this cost must be included in the transfer value. If you don’t really care about future escalation you could accept, following a transfer, a pension which stays level in retirement, but starts much higher.

Finally, at least for the purposes of this short summary, if you want a higher level of tax free cash when you start to draw your benefits you will often be very pleasantly surprised just how much extra you could take if you transfer your benefits to a personal pension.

Start planning early, though. Ideally at least a year before your scheme’s normal retirement age, and preferably much earlier.

So, don’t accept the first offer you receive………