Finance glossary
Defined Benefit Pension
Also known as: Final salary pension, DB pension, Career average pension
In simple terms
A defined benefit pension promises you a set income in retirement based on your salary and years of service — the employer, not you, carries the investment risk.
On this page
What does defined benefit mean?
A defined benefit (DB) pension promises a specific income in retirement, worked out from a formula — typically your salary (final or career-average) and the number of years you were a member. It is sometimes called a “final salary” pension.
The employer is responsible for making sure the money is there to pay it, so the investment risk sits with them, not you.
How a defined benefit pension works
Instead of building a pot, you build an entitlement — for example, 1/60th of your salary for each year of membership. At retirement this is paid as a guaranteed income, usually rising each year and often providing a pension for a surviving partner.
DB schemes are now rare outside the public sector, and are valuable precisely because the income is guaranteed.
How could this affect me?
A DB pension offers rare certainty — a known, inflation-linked income for life. Giving one up (for example by transferring to a defined contribution scheme) means taking on investment risk yourself and is usually not in your interest.
Because these transfers are so significant, regulated advice is required for larger DB transfers, and you should be very cautious of anyone pushing you to move out.
Things to watch out for
- Transferring out of a DB scheme is usually a bad idea — you give up a guaranteed income.
- Scammers often target DB transfers; be very wary of unsolicited approaches.
- The rules and value are complex — get regulated advice before any transfer.
Know your rights
- For DB transfers valued over £30,000 you must normally take regulated financial advice (FCA rules).
- Most DB schemes are protected by the Pension Protection Fund if the employer becomes insolvent.
- You can complain to the Financial Ombudsman Service or The Pensions Ombudsman.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, Defined benefit (final salary) pensions (opens in a new tab). Accessed 22 Aug 2026.
- FCA, Defined benefit pension transfers (opens in a new tab). Accessed 22 Aug 2026.