What is a pension transfer?

A pension transfer is when you move your pension from one provider to another. You want to take a more active role in investing your pension by transferring it into a self-invested personal pension (SIPP). You want to consolidate your pensions into one pot. You want to move to a pension provider with lower charges.

How does a pension transfer work?

A pension transfer from a defined benefit (final salary or career average) pension scheme usually means giving up your income for life in return for a cash value. This cash is then moved and invested in another pension scheme.

Does it cost to transfer one pension to another?

One of the biggest expenses involved in pension transfer charges, aside from the actual advice cost, can be exit fees. Exit fees are when your current pension provider charges you to move the money from your pensions into another scheme. The money for the fee is deducted from your pension funds.

Do I need a financial advisor to transfer pension?

Will I have to consult a financial adviser if I want to transfer my pension? Sometimes if you want to transfer pensions, advice is compulsory. This depends on the Cash-Equivalent Transfer Value of your defined benefit pension.

Is it good to transfer your pension?

You might decide to transfer your pensions for more control, simpler retirement planning or perhaps just better value. It might not always make financial sense if you have a pension with certain benefits or guarantees, so it’s important to investigate this before you transfer.

Is it a good idea to transfer my final salary pension?

The financial flexibility offered by Pension Freedoms, and therefore transferring your Final Salary pension could prove beneficial in terms of being able to access a series of lump sums from your fund, rather than the single lump sum you’ll get from your Final Salary scheme.

Are pensions worth transferring?

These schemes can prove lucrative if you’ve been in them a long time, so it might not always make sense to transfer out. In fact, if your defined benefit pension pot is worth £30,000 or more you’ll need to take independent financial advice before you transfer.

Can I transfer a final salary pension?

If you do decide to transfer your final salary pension, the amount you get to invest is known as the ‘cash equivalent transfer value’, which is calculated by your final salary scheme. You must then invest this ‘amount’ in either a pension scheme with another employer or a personal, self-invested or stakeholder pension.