Can I Transfer My Pension Myself?

Interested in transferring your own pension? In this article, you’ll find out more about how the process works, when it’s allowed, and when it isn’t.

If you’d like a little guidance with your ‘DIY’ pension transfer, get in touch. The expert advisors that we work with have plenty of experience in pension transfers – they can help you to make sure that you transfer to the right scheme for you.

Can I transfer my pension myself?

Possibly – it depends on the kind of pension you want to transfer from, and where you want to transfer it to.

Transferring from a defined benefit/workplace/final salary scheme

In many instances, it’s not advisable to transfer out from a defined benefit scheme. However, you may be able to, provided the value of the scheme is below £30,000.

The requirement to take advice for final salary pensions larger than £30,000 is designed to protect you.

In many instances, your scheme provider will be happy to help you transfer – many such schemes are trying to reduce the number of people that they pay out to. As such, they may offer you a cash incentive to move, increasing the size of your cash equivalent transfer value (CETV).

Of course, just because your provider offers you a hefty CETV, doesn’t necessarily mean you’re getting a good deal. Defined benefit pensions are often referred to as ‘gold plated pensions’ for good reason.

See our guide to pension risk transfer if you’d like to read more incentive schemes in DB pensions, or get in touch if you’d like to see if your provider is offering you a good deal or not.

Conversely, some schemes won’t be too keen on letting you go, unless you can find a suitable scheme to transfer into (which isn’t always easy).

If the value of your scheme is above £30,000 – by law you have to take advice from a regulated financial advisor before moving your funds. If your pensions expert advises against making the transfer, your new scheme might not allow you to transfer in. Other schemes will – ultimately leaving the final decision to you. It’s not a legal requirement.

Transferring from an occupational to a personal pension

Plenty of people have done this in the past, but it really depends on the kind of occupational pension you want to move.

DIY pension transfers with your occupational pension are much more difficult to do properly. The benefits that you built up at your company scheme can be very difficult to replicate on the open market, and if you don’t do it properly, you could lose out.

If you’re struggling to find a suitable scheme to transfer into, get in touch – the advisors we work with may be able to help you find the right one.

Transferring from an ‘unfunded’ occupational pension

Some unfunded defined benefit schemes won’t allow you to transfer out at all – typically these are public sector pensions, such as police and armed forces pensions.

The law is very clear here – so if you want to transfer out from such a scheme, you’re out of luck.

Transferring between occupational pensions

In many instances, you’re more likely to retain the benefits you built up in your occupational pension if you transfer to another occupational pension scheme (as opposed to personal pension).

The catch, of course, is finding a suitable occupational scheme that’s willing to accept the transfer – considering such schemes are often only open to people who work at the company in question.

Transferring from a personal/defined contribution pension

After the Pension Freedoms of 2015, personal pensions like SIPPs have continued to grow in popularity. Designed with flexibility in mind, DIY personal pension transfers are far more straightforward than if there is a workplace pension involved.

These kinds of pension don’t usually offer any kind of guarantees or benefits that would make the transfer process more difficult (or result in you losing out), but you should certainly check with your provider beforehand to make sure.

What’s an ‘execution only’ pension transfer?

The Financial Conduct Authority’s (FCA) definition is somewhat complex, but in simple terms, it means:

• You haven’t asked for, or received advice on the transaction
• It’s your decision, and your decision alone
• Nobody else can be held responsible if it turns out to be the wrong decision later

You could think of execution only as a ‘DIY pension transfer’.

Many people know enough about investing that they can forego advice. If you are one of these people, an execution only transfer may be for you – but why not speak to one of the pensions experts we work with regardless? We don’t charge a fee and there’s no obligation.

As such, it’s quite common amongst personal pensions. Execution only occupational pension transfers tend to be rarer due to the restrictions and complexity involved.

Disadvantage of execution only transfers

As we said above, the main drawbacks of the execution only approach are that you don’t have any regulatory recourse if you feel that you made the wrong decision later.

If you take advice, and the decision turns out not to be right for you, you can complain to the FSCS that you were poorly advised. Depending on the kind of pension you hold, this coverage could be up to 100% of the funds lost.

How do I get the best deal on a DIY pension transfer?

You should consider the following:

You need to pay in a lot to get a decent return

Low interest rates and people living longer means the returns offered by annuities are very low.

Go execution only

If your scheme is eligible for an execution only pension transfer, you could consider this option. But be mindful of the risks involved.

Do your research and shop around

It may sound obvious, but it’s worth repeating. The pension market is immense, and if you’re willing to look far and wide, you could save yourself thousands in the long run. Don’t just go with what your pension provider offers. The best deal is probably not the first deal, the second, or the third. Although it doesn’t hurt to do a bit of research yourself, the best way to compare the deals on offer is through an independent pensions expert who has access to the entire market.

Make an enquiry here and we’ll connect you to one.

Speak to an expert

An independent pensions expert has access to a huge range of providers, including some that you may not have heard of, or may not be able to access directly.

Working with an expert can also provide you with FSCS protection – in case you later decide that the transfer wasn’t right for you.

If you have questions about transferring your pension and want to speak to an expert for the right advice, call us today on 0808 189 0463 or make an enquiry here.

Then sit back and let us do all the hard work in finding the advisor 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.