Are you worried that 2025 might be the worst time to transfer your Defined Benefit (DB) pension?If you’ve been tracking your CETV recently, you’ll have noticed that values are coming down. The key driver here is gilt rates. By early September, the 15-year gilt yield hit a record high and the 30-year gilt yield climbed to its highest level in three decades. And when gilt rates rise, CETVs fall. It’s as straightforward as that.
Back in 2020 and 2021, when gilt rates were at record lows, many clients found themselves in a “sweet spot”—CETVs were at some of the highest levels we’ve ever seen. Fast-forward to 2025, and the picture looks very different. Naturally, this has left people asking: Did I miss my chance? Should I hold off and wait for things to improve? Or is now still the right time to consider a transfer based on my circumstances?
Want to dive deeper into CETVs, gilt rates, and whether 2025 is really the worst time to transfer? Watch our dedicated video, where I explain why timing the market is usually a losing game, and most importantly, what you really need to focus on when deciding whether a Defined Benefit transfer is suitable for you.
What is a Defined Benefit (DB) Pension?
A Defined Benefit (DB) pension is one of the most valuable retirement benefits you can have. Unlike a Defined Contribution (DC) scheme, where your income depends on how investments perform, a DB scheme promises you a guaranteed income for life, once you reach your scheme’s retirement age (often 60 or 65).
The main advantage is certainty. You don’t have to worry about how the stock market performs. Most DB pensions are index-linked, meaning your income rises with inflation. Behind the scenes, trustees, and the Pension Protection Fund (PPF) as a safeguard, are responsible for making sure you receive the income you’ve been promised.
In short, a DB pension provides financial security and peace of mind that your income will continue for as long as you live, usually with benefits extending to your spouse or dependents after your death.
What Are CETVs & Why Do Gilt Rates Matter?
A Cash Equivalent Transfer Value (CETV) is the lump sum your DB scheme offers if you choose to transfer out instead of taking the guaranteed lifetime income. Why do gilt rates matter? Because schemes use them when calculating how much cash they need to set aside today to cover your future benefits.
When rates are low, CETVs are higher, because the scheme needs more money now to fund the same long-term promise. When rates rise, CETVs fall, because the scheme needs less upfront cash to deliver the same benefits. Gilt rates, specifically the long-term one (e.g. 30-year), significantly affect CETVs. The past two decades show just how much these rates fluctuate:
Source: https://www.marketwatch.com/investing/index/spx
It’s also worth stressing that gilt rates aren’t the only factor influencing CETVs, but in our experience, they are one of the biggest drivers of fluctuations. So while 2025 may not give you the “best value” CETV compared to 2020 or 2021, there’s also no guarantee rates won’t rise further, reducing CETVs even more in the future.
Should You Time Your Defined Benefit Transfer Based on CETV?
In our experience, the decision to transfer your DB pension should never be based solely on the CETV figure. A good adviser will look at your personal situation and what you want to achieve in retirement.
For example, some clients with a £500,000 CETV and a guaranteed annual income of £20,000–£30,000 might feel that income doesn’t match their lifestyle goals. They may want the flexibility to spend more in the first five to ten years of retirement, whether that’s travelling, funding home improvements, or simply enjoying their time without income restrictions.
These “soft facts” are critical for the pension transfer specialist to understand. They use this information to build a detailed analysis and report that reflects not just the numbers, but your goals and priorities.
That said, at the time of writing, most regulated DB transfer reports advise staying in your DB scheme. That’s because:
- You get a guaranteed, index-linked income for life.
- There’s no direct exposure to market risk.
- The Pension Protection Fund (PPF) provides an extra safety net.
Transfers typically only make sense in specific circumstances—such as ill health or unique family situations, where the guaranteed income is unlikely to provide value over the course of your life.
Why Independent Analysis Matters?
When it comes to Defined Benefit transfers, the stakes are high. For most people, their DB pension is one of the most valuable financial assets they’ll ever hold. That’s why the FCA has put strict rules in place to ensure transfer advice is completely impartial.
At Cameron James, while we are specialists in pension transfers and retirement planning, the actual suitability report for a DB transfer is always completed by an independent, FCA-regulated Pension Transfer Specialist (PTS). This independent step is vital for three reasons:
- Unbiased assessment – The independent PTS has no stake in whether you transfer or not. Their sole responsibility is to review your scheme, CETV, and personal circumstances to determine if transferring is in your best interests.
- Regulatory protection – The FCA requires this separation to protect clients. If the advice is to stay in your DB scheme, that recommendation is backed by a regulated, documented report that carries weight and safeguards you.
- Clear division of roles – Our role at Cameron James is to look after your broader financial plan: investment strategy, platform selection, cashflow modelling, and ongoing advice. The independent PTS, on the other hand, is responsible for the critical decision on whether a transfer is suitable at all.
This two-adviser model ensures that your DB pension is never transferred without a robust, independent check. It means you get the benefit of holistic financial planning from our team, while also having the reassurance that any recommendation has been tested by a regulated specialist whose duty is only to you and the regulator.
In practice, this gives clients confidence. You’re not just hearing one firm’s opinion—you’re receiving a transparent, independent assessment of one of the biggest financial decisions of your life.
Final Thoughts: Should you keep or transfer your DB pension in 2025?
Defined Benefit pensions remain one of the most valuable and secure retirement assets available. They provide certainty, peace of mind, and protection against inflation, benefits that are difficult to replicate elsewhere.
Yes, in 2025, CETVs are less generous than they were in 2020 or 2021. Rising gilt rates have shifted the balance, and for many people, the headline transfer values don’t look as appealing as they once did. But it’s important to remember: you can’t turn back the clock, and you can’t control where rates go next. What you can control is your financial planning, your lifestyle priorities, and how you structure your retirement income.
For most clients, keeping a DB pension will still be the right option. The guaranteed, index-linked income, combined with the safety net of the Pension Protection Fund, makes it extremely difficult to justify transferring out on purely financial grounds. However, there are situations where a transfer might be the right call, particularly where flexibility, health considerations, or family circumstances mean the DB scheme cannot deliver what you need.
The key is not to obsess over CETV figures or market conditions, but to seek independent, regulated advice. A proper analysis will consider not only your CETV but also your goals, risk appetite, and long-term cashflow needs. That way, you can make an informed decision based on your full picture, not just on whether 2025 looks like the “worst time” to transfer.
As always, take care with your UK pension assets, particularly Defined Benefit schemes. They are incredibly valuable, and decisions about transferring should only ever be made with a clear understanding of the trade-offs involved.