Pension Drawdown Transfers
Ever since the introduction of the ‘Pension Freedoms’ in 2015, the popularity of drawdown schemes continues to grow.
In this article, you’ll learn how the transfer process works in drawdown, and how to transfer in (or out) of a drawdown pension.
Considering drawdown, or need some expert advice with your existing account? Give us a call on 0808 189 0463 or make an enquiry.
The pension advisors we work with can help you to put together the ideal plan for your requirements.
Can I transfer my pension to a drawdown account?
That depends on what you’re currently doing with your pension pot. If you’ve not yet drawn your pension, the answer is an obvious ‘yes’. We’ve covered some alternative scenarios below.
Can I transfer my pension into drawdown from an annuity?
This might prove difficult. Once you purchase an annuity, you usually have a short period (usually up to 30 days) in which you can change your mind. After that, there’s usually no going back – so it’s worth really weighing up the pros and cons before committing to an annuity.
Make an enquiry to speak with an expert pensions advisor and find out what your options are.
Can I transfer to drawdown from a defined benefits (DB) pension scheme?
Yes, it’s possible. Some employers offer cash incentives for employees/former employees to move out of DB pension schemes – though even with this additional incentives, this still might not be right for you. You should speak to a professional advisor if you’re considering this.
Assuming you do decide to move from DB to drawdown, the benefits you’ve built up in your DB pension will be converted into a cash lump sum called a ‘transfer value’ (also referred to as a ‘cash-equivalent transfer value’ or ‘CETV’).
Once you take this sum, you have to invest it. You have a few different options at this point – one of which is moving it into your personal pension, for drawdown.
Can I move my drawdown pension to a different provider or another type of pension?
Yes, pensions with drawdown facilities are very flexible, and there are a few different ways that you can move yours.
Can I move my drawdown pension into an annuity?
Yes, you can buy an annuity – though as we said before, this is usually not reversible, and not something to be taken lightly.
As an alternative – provided you had a large enough pension pot, you could use some of your pension funds to buy an annuity, retaining the rest for drawdown.
Can I transfer my drawdown pension to another drawdown provider?
Yes – many people transfer to another provider’s scheme – a common example is to get a better rate.
It is worth bearing in mind, however, that this can incur additional costs and penalties. Substantial exit fees and the loss of guarantees are not uncommon – so look before you leap.
The costs need to be weighed up in full before making such a decision. Again, the advice of a professional advisor might help you to make an informed decision. If you get in touch we can arrange for an expert to contact you and discuss further.
How to transfer a drawdown pension
Assuming that your pension is eligible, transferring a drawdown pension is usually quite simple. The process would generally be handled by your new provider in the main – the more information you can provide them, the more straightforward the move should be.
The process may be simple, but it can also be slow. Asides from exit fees, many providers don’t make it quick to transfer your account. This means that waiting a few months for your drawdown pension to move is not uncommon, even if your new provider is ‘on the ball’ with all the paperwork.
The best way to kick off this process is to make an enquiry and start off by speaking to an advisor. The pensions experts we work with can review your circumstances, conduct a pension review and ensure that you end up with the best product to meet your retirement needs.
Speak to a pensions expert
If you have questions and want to speak to an expert for the right advice, call Online Money Advisor today on 0808 189 0463 or make an enquiry.
Then sit back and let us do all the hard work in finding the pensions expert with the right expertise for your circumstances. We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.