Pension Transfers
What is a pension transfer?
You may have heard the term ‘pension transfer’ but may not be sure of what it means. Simply put, a pension transfer involves switching providers to another pension provider that may be better suited to your individual objectives.
Why should I consider a pension transfer?
UK pensions rules are complex. It may be that your current pension (s) tick all of the boxes and are suitable for your objectives. If that’s the case, then there’s no need to transfer your pension. The most important thing is comparing the market against your objectives to understand if there’s anything more suitable. With pension rules changing dramatically over the past few years and more relaxed rules on how you can take funds out of your pension, there’s never been a better time to compare!
It could be that your current pension does not have access to any other currencies and you are concerned about the exchange rate into your local currency or that you are looking to change the structure of your pension completely from a defined benefit / final salary pension to a personal pension. Whatever the reason, it’s can always be worth exploring your options.
How to transfer a pension
You may have to get financial advice before you can transfer your pension. Please contact us to get clarification.
Questions to ask your current provider
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-Can I transfer my pension? There can be restrictions on which pensions you can transfer.
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-What is the ‘transfer value’ of my pension? If it’s the same as your pot value, it’s unlikely you’ll be charged a fee when you transfer.
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-What fees will I have to pay if I transfer out?
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-Will I lose the right to take out my money at a certain age? This is called a ‘protected pension age’.
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-Will I lose any special features, e.g. a guaranteed annuity rate?
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-Will I lose the right to take a tax-free lump sum of more than 25% of my pension? This is called a ‘protected tax-free sum’.
You then would need to shop around for a new provider to transfer your pension.
Questions to ask your new provider
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-Do I apply to transfer through you or my current provider?
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-Are there any fees for transferring in, e.g. set-up fees?
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-Do I have to make regular payments into the new pension?
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-What investment funds and levels of risk do you offer? You may need help from a financial adviser with this.
- -What options do you have for when I want to take my money out?
You’ll need to complete an application form to request the transfer. If you’re transferring more than one pension you may have to complete more than one application.
Transferring your pension to a non-registered UK pension scheme or an ‘unrecognised’ overseas scheme will mean you’ll pay tax on the transfer.
Mandatory financial advice
Legally you must get financial advice if you want to transfer a defined benefit pension worth more than £30,000.
Need pension advice? Let us help you.
UK Pension Help is an independent company who provides free online pension resources and tools.
To further assist you, we also offer a professional introduction service that connects you with UK qualified, Financial Conduct Authority (FCA) regulated advisers. We have a wide network of UK advisers who are living and working in Europe, the Middle East, America and Asia, who have been overseeing pension transfers and advice for over 10 years.
Book a free, no obligation consultation with a qualified financial adviser to get all your pension and retirement questions answered.