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Final-salary fears over solvency of firms

Advisers need to weigh up the benefits of final-salary pension guarantees against the financial strength of the employers, given current market conditions, says Axa Winterthur.

AW Wealth Management head of pension development Mike Morrison says assessing the strength of the employer is even more vital than usual when evaluating pension transfers.

He says: “If you have been in a scheme for a long time or you are a higher-earner, your pension is potentially at risk if your employer goes bust. The economic climate means considering the strength of your employer is just as valid a reason to be thinking of transferring as the guarantees are to make you think about not transferring.”

Hargreaves Lansdown pensions analyst Laith Khalaf says: “It is incredibly difficult for a financial adviser to make a judgement on the solvency of a business.”

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