Updated: November 20, 2019

Should I Transfer My Pension?

Is transferring your pension the right thing to do? Our comprehensive guide will outline all the pros and cons so you can make an informed decision.

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Richard Angliss

Author: Richard Angliss - Finance Expert

Updated: November 20, 2019

Among the Pension Freedoms that have been granted, is the ability to transfer your pension (in all but a few circumstances). However, while it’s now easier to transfer your pension pot, the big question for anyone considering doing so is should you transfer your pension?

The answer is different for everyone as it depends on your unique circumstances. The good news is that the advisors we work with are experts when it comes to pension transfers, and can give you the right advice.

What pension transfer options are there?

There are a number of different pension types and each one offers slightly different management options and benefits. While this doesn’t answer the question of whether you should transfer your UK personal pension, if you hold one type of pension, it’s usually possible to transfer into a different pension by type or provider.

Current UK pension types include:

Each of them have their own advantages and disadvantages and for those of you considering transferring your pension, it’s important to discover if the benefits of your existing pension outweigh the drawbacks.

Where to get pension transfer advice

You should be able to find out more about your UK pension and whether you can and should transfer it, by accessing your account details. If you don’t have the paperwork easily to hand, then you’ll need to get in touch with your provider or employer, if they manage your pension for you, who will send through the relevant details.

However, even after you’ve received or found all the information that’s available on your pension, there could be a lot to look through. Some of the details can also be complicated and more than a little confusing.

If you’re unsure of the benefits, rules and fees of your pension, you could get in touch with an experienced pensions advisor, like those we work with. We can connect you with an expert advisor who can help you understand your pension and help you determine whether a transfer is in your best interest.

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What are the benefits of transferring a pension?

The variety of pensions options now available means that a pension transfer may work well for you and could provide you with a larger pension pot for your retirement income.

For those of you who have a good understanding of the financial and investment markets, a pension transfer could give you more hands-on management of your retirement pot. Or, if you’ve worked for a few different companies and now have more than one dormant or frozen UK pension, a transfer should allow you to bring all your separate pensions into one fund.

Other potential benefits of transferring your pension are:

  • You could transfer out of a pension with high management fees
  • You can keep closer track of how your pension is performing if you choose to transfer
  • The pension you transfer into could charge lower fees but provide better additional benefits

Things to consider

While there are potential benefits that have you convinced that you should transfer out of your pension, there are also potential risks. Although you will keep the financial and some other benefits you’ve accrued while paying into your pension, you could lose some of them as well.

The fees to transfer out of your pension could also be high enough to notably diminish the total amount and make the question of whether you should transfer your pension fund or funds more difficult. It’s important to find out more about the potential risks of a pensions transfer and one of the easiest ways to do that is to speak with one of the experienced pensions advisors we work with.

Are there any pension types that can’t be transferred?

While most pensions are eligible for transfer and two or more different pensions can be put into a single pot, there are some pensions that can’t be transferred.

Since 2015, member of unfunded public sector pension schemes are no longer able to transfer their pension into any kind of defined contribution scheme or personal pension. That includes:

Although there are a couple of caveats. If you’ve been in the scheme for less than two years then you can transfer out of your defined benefits pension, with a cash equivalent calculated by the provider. It’s also typically possible to transfer your unfunded public sector pension from one scheme into another.

However, considering the benefits associated with a defined benefits scheme, including any one-off payment at retirement age followed by a guaranteed salary-linked pension, you should always seek professional advice, even if you plan on transferring it to a different but similar pension scheme.

Should you transfer?

Deciding whether or not you should transfer your UK pension isn’t always easy. Where the choice isn’t obvious or you’re not too sure what the benefits would be if you did transfer your pension or what the fees and charges involved are, you may think staying with your existing pension is the right option. But that’s not always the case.

If you are unsure about whether you should transfer your personal pension and if doing so would leave you better off, you can either do a lot of your own research to find out exactly what the difference between pensions is, and also what the costs involved are. Or you could speak with a pensions advisor experienced in pension transfers like the ones we work with.

They have all the information and knowledge you need to make an informed decision and to make sure that if you do transfer your pension, you’ve made the right decision for your retirement.

Speak to a pensions transfer expert today

If you are unsure about whether or not you should transfer your pension and would like to speak to an expert to find out more, call Online Money Advisor today on 0808 189 0463 or arrange a free, no obligation chat online.

Then, just sit back and relax while we do all the hard work of finding the pensions advisor with the right experience for your specific needs. They will then thoroughly assess your situation and pension or pensions before giving you any advice.

Ask a quick question

We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in pensions. Ask us a question and we'll get the best expert to help.

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Richard Angliss

Richard Angliss

Finance Expert

About the author

Richard Angliss has made a career in financial services which stretches over 40 years.

His early career was spent learning about the various financial products and applying them to prudent advice, working for one of the largest life assurance and investment firms. After that he joined the financial services arm of a very well-known firm providing independent advice to their 8 million customers.

For the last 20 years he has been involved in building software solutions that help Advisers and clients work together to achieve good financial outcomes and helping to set up three independent advisory firms. He also has written many articles for financial services publications and provided commentary for newspaper journalists.

At an early stage in his career he realised the great satisfaction that comes with being able to help people achieve their goals and protect their families. “Regulation of financial services has hugely impacted on ensuring people get appropriate advice. The issue these days is access to that advice and just as importantly regular reviews to make sure that everything stays on track”.

With the growing development of online resources such as Online Money Advisor he sees a great future for people to access advice to make their pension and investment work harder for them.  Plus, of course, to ensure they have insurance products in place that will be required when unforeseen events happen.

He knows getting that balance right is crucial to prudent financial planning and the wellbeing of individuals and their families.

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*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

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