Defined Benefit Pension Value Calculator

A DB pension pays a guaranteed income in retirement based on your salary and years of service — "final salary" (based on leaving salary) or "career average" (based on average earnings). The employer bears the investment risk.

The most common method is the HMRC 20:1 multiplier: annual pension × 20. Example: £20,000/year pension = £400,000 capital value. Actuarial CETV figures may differ significantly.

Cash Equivalent Transfer Value is the lump sum your scheme would offer to transfer your DB benefits to a DC pension. CETVs can be significantly higher (or lower) than simple multiplier calculations.

For most people, a DB pension is more valuable than a DC pension of the same capital value due to its guaranteed income, inflation protection, and longevity insurance. Transfers are regulated — advice is mandatory for CETVs over £30,000.

The NHS pension is a Career Average (CARE) DB scheme. Accrual rate is 1/54th of pensionable pay per year. It includes CPI inflation protection and a generous employer contribution of around 20.68%.

Most DB pensions in payment are indexed to CPI (capped at 2.5% or 5% depending on scheme) or RPI. This is a significant advantage over fixed annuities that lose real value over time.

Most DB schemes provide 50% of the member's pension to a surviving spouse. This valuable benefit is often not reflected in capital value calculations.

Check your pension scheme's annual benefit statement, member portal, or contact the scheme administrator. Your statement shows accrued pension and projected benefit at normal retirement age.

Final salary schemes typically accrue at 1/60th or 1/80th per year. Career average schemes often accrue at 1/49th or 1/54th. Example: 1/60th × £60,000 salary × 30 years = £30,000/year pension.

The PPF protects DB scheme members if their employer becomes insolvent. PPF pays 100% of pension if over PPF age; 90% (with a cap) for those below. Members who transferred away before insolvency are not protected.

Courts can issue a Pension Sharing Order, splitting the DB pension's CETV at divorce. The receiving spouse gets a "pension credit" — a share of the pension either as a deferred scheme benefit or transferred out.

Auto-enrolment (2012+) is primarily for DC pensions. Many DB schemes pre-date auto-enrolment. Public sector DB schemes (NHS, teachers, civil service) continued unchanged.