How DB schemes work

The scheme promises a specific income at your normal pension age. The size of the income is calculated from an accrual rate (often 1/60th or 1/80th of pensionable salary per year of service). Many DB schemes also offer an inflation-linked income.

Transfers and trade-offs

You can transfer most private-sector DB schemes to a defined contribution arrangement, but this gives up the guaranteed income for a Cash Equivalent Transfer Value. Transfers worth more than £30,000 require advice from an FCA-authorised financial adviser before they can proceed.

• Guaranteed income for life, often with inflation protection
• Spousal benefits typically continue at a reduced level after death
• CETV can look large but trades certainty for market exposure
• Public sector DB schemes are usually unfunded and cannot be transferred

How Optiml uses DB income

Optiml treats DB income as a fixed annual income stream that begins at your chosen start age. The model uses it as a floor, then layers SIPP, ISA, and GIA withdrawals on top to fill the gap between DB income and your desired after-tax lifestyle.