What Is a CETV? UK Pension Transfer Value Explained (2026)

A Cash Equivalent Transfer Value, or CETV, is the lump sum a defined benefit pension scheme will pay into another arrangement in exchange for giving up your future income from that scheme. It is one of the most misunderstood figures in UK retirement planning, partly because it can look large in isolation and partly because it moves with forces that have nothing to do with how much you personally paid in.

In short

• A CETV is the capital value a defined benefit scheme places on the pension you are giving up.
• It is calculated by the scheme actuary and is highly sensitive to gilt yields.
• A quoted CETV is guaranteed for three months from the calculation date.
• You can request one transfer value free of charge in any twelve-month period.
• If the value is more than £30,000 you must take regulated advice before transferring.

What a CETV actually represents

With a final salary or career average pension you are promised an income for life, usually rising with inflation and often with a spouse's pension attached. A CETV converts that promise into a single capital sum. In effect the scheme is asking how much money it would need to set aside today, and invest, to meet the income it has promised you. That sum is the transfer value. Because it buys out a guaranteed, inflation-linked income, comparing it with a defined contribution pot of the same size is rarely like for like.

How schemes calculate the figure

The scheme actuary starts with your accrued pension, then projects it forward with assumed increases and discounts it back to a present-day value using a discount rate. That discount rate is anchored to gilt yields, the return on UK government bonds. When gilt yields are low, the scheme needs to set aside more money to hit a given future income, so the CETV is high. When gilt yields rise, the same income can be funded with less, so the CETV falls. This is why transfer values dropped sharply from 2022 onwards as yields climbed, and why two people with identical pensions can be quoted very different values at different dates.

The factors that move your value

The headline multiple, the CETV divided by your annual pension, is scheme-specific. During the low-yield period of 2020 and 2021 some schemes quoted multiples of thirty to forty times the annual pension. Multiples in the low-to-mid twenties have been more typical since yields normalised. Treat any multiple as a snapshot, not a fixed entitlement.

The three-month guarantee and the free request

Once a scheme issues a CETV it must hold that figure for three months, the statutory guarantee period. If you do not complete a transfer within that window the value lapses and a fresh calculation, at the prevailing gilt yields, applies. Schemes must provide one transfer value free of charge in any twelve-month period; further requests inside the year may carry a fee.

When advice is mandatory

If the value of your safeguarded benefits is more than £30,000, you are legally required to take regulated financial advice before transferring out of a defined benefit scheme. That advice must come from an adviser holding the FCA's pension transfer specialist permission. The rule exists because giving up a guaranteed income is, for most people, irreversible and high stakes.

FAQ

Is a CETV the same as my pension pot?

No. A defined benefit pension has no pot in your name. The CETV is the capital value the scheme places on the guaranteed income you would be giving up, calculated by the actuary.

How long is a CETV guaranteed?

Three months from the calculation date. After that the scheme must recalculate at the gilt yields applying on the new date, which may give a higher or lower figure.

How often can I request a CETV?

Schemes must provide one transfer value free of charge in any twelve-month period. Additional requests within the year may attract a charge.

Why is my CETV lower than a friend's with the same pension?

Transfer values depend on the date of calculation, the scheme's assumptions, your age and the structure of your benefits, such as inflation-linking and spouse's pensions. Identical annual pensions can produce very different values.

Do I have to take advice to transfer?

If the safeguarded benefits are worth more than £30,000 you must take regulated advice from a pension transfer specialist before transferring out of a defined benefit scheme.