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How do the new UK pension flexibilities affect my defined benefit/final salary scheme?

While the new UK pension flexibilities are enabling people to manage their pensions much more freely, for those with public sector defined benefit schemes, the UK government has banned any transfer to other types of pensions (like personal pensions) to take advantage of the increased flexibility. As the majority of public sector schemes operate on an unfunded basis, out of general UK taxation, if more people were to transfer out this could expose the UK Treasury to significantly higher annual costs.

However, transfers from private sector defined benefit schemes to defined contribution/personal pensions (excluding pensions in payment) can continue, subject to any person wishing to transfer receiving the required financial advice.

UK private sector defined benefit schemes continue to be heavily in deficit. According to Mercer, as of 31 December 2016, the combined accounting deficit of FTSE 350 Company Schemes rose to ₤137 billion. At the end of December 2015 the deficit was in contrast ₤39 billion. This is despite the FTSE 100 index ending 2016 at an all time high. If you have a deferred UK final salary scheme, an important question to consider is will my pension fund have sufficient value to meet my pension benefits in the future?