What Is a Transfer Value Analysis (TVAS)?
Nadeem Pervazis a solicitor at Edward & Amaury Solicitors, a law firm authorised and regulated by the Solicitors Regulation Authority. Content is reviewed for legal accuracy and compliance with FCA guidance and SRA conduct standards.
TL;DR — Quick Summary
- ▸A TVAS was a required analysis that advisers had to produce when recommending a DB pension transfer — it compared the guaranteed benefits against projected returns from the transfer value.
- ▸The critical yield — the investment return needed to match DB benefits — was central. High critical yields almost always showed a transfer was unsuitable.
- ▸From October 2018, a Transfer Value Comparator (TVC) replaced the TVAS — it compared the transfer value against the cost of buying equivalent annuity income.
- ▸If your adviser recommended a transfer despite a negative TVAS or TVC, that is strong evidence of unsuitable advice.
- ▸Failure to produce a TVAS or TVC at all was itself a regulatory breach.
When a financial adviser recommended that you transfer out of a defined benefit pension, they were required by FCA rules to produce a Transfer Value Analysis — a document designed to show whether the transfer value could actually replicate the guaranteed income you were giving up. In most cases, it could not. Understanding your TVAS (or TVC) is often key to understanding why you have a claim.
Quick Answer
A TVAS compared your DB scheme's guaranteed benefits against what your transfer value could realistically achieve once invested. A high critical yield almost always showed a transfer was unsuitable. If your adviser recommended the transfer regardless, that may be evidence of mis-selling.
How a TVAS Worked
The TVAS used a standardised methodology to answer a simple question: at what annual investment return would the transfer value generate the same income as the DB scheme? This return was called the critical yield.
- If the critical yield was low (say, 2–3%), it meant a relatively modest return was sufficient — and a transfer might potentially be considered if the member had specific circumstances that justified it.
- If the critical yield was high (say, 6%, 8% or above), it meant the transfer value would need to achieve consistently high returns in the market to match the guaranteed DB income — a very difficult target, especially given the guaranteed and index-linked nature of DB benefits.
In the vast majority of cases, the critical yield was high — and the appropriate advice was to remain in the DB scheme.
A High Critical Yield Almost Always Meant: Do Not Transfer
Where the TVAS showed a critical yield above about 5–6%, it was very difficult for an adviser to justify a transfer recommendation. Many advisers recommended transfers despite high critical yields — often because they or the firm received significant commission. These recommendations were almost always unsuitable.
The Transfer Value Comparator (TVC) — from October 2018
From October 2018, the FCA changed the rules to require a Transfer Value Comparator (TVC) in addition to (and later replacing) the TVAS for most purposes. The TVC took a different approach:
- It calculated the cost of purchasing, from an annuity provider, benefits broadly equivalent to those the DB scheme would provide.
- It compared this cost against the transfer value being offered.
- Where the transfer value was less than the replacement cost — which was almost always the case — the TVC highlighted this gap prominently.
The TVC was designed to make the cost of giving up DB benefits immediately visible, without relying on projection assumptions. See our guide on what a CETV is and the gap it represents.
TVAS or TVC — What Matters for Your Claim
Whether the analysis was a TVAS or TVC, the key question is the same: did it show the transfer was in your interests? If the analysis was negative — a high critical yield, or a transfer value below replacement cost — and the adviser recommended the transfer anyway, that recommendation was almost certainly unsuitable. The analysis itself is important evidence in a claim.
What If You Cannot Find Your TVAS?
If you cannot locate your TVAS or TVC, you can:
- Make a data subject access request (DSAR) to the adviser firm or its administrator/liquidator
- Ask the FSCS to obtain evidence when making an FSCS claim
- Contact us — we can advise on evidence recovery as part of assessing your case
Even without the TVAS, a loss can still be demonstrated through other evidence. See our evidence guide.