For most savers, the prospect of a guaranteed income until you die would be hard to turn down. Defined benefit pension schemes (DB) offer an inflation-linked salary in retirement. They are highly sought after, expensive for employers to fund, and increasingly rare. Just 7pc of private sector employees enjoy membership to these gold-plated schemes, compared with over 80pc in the public sector. But for some intrepid DIY investors, ditching these lucrative benefits has been a gamble that’s paid off. You can swap a guaranteed pension managed by trustees for a “defined contribution” plan where you assume all the risk of generating an income but have far more control and better tax benefits on death. So-called “transfer values” – the amount you receive in your private pension for giving up the promise of an annual income – are tied to the yield on government bonds. Before interest rates shot up, some people were offered 30 or 40 times the value of their pension to give them up. At 61, Dave Pickett was starting to think about retirement. His gold-plated pension beckoned after a long career working in IT for HSBC. The defined benefit scheme, based on his final salary, entitled him to a lump sum of £75,000...