Where Can I Transfer My Pension To?
Depending on your needs and circumstances, there could be a number of options available for pension transfer. Read on to find out what they might be, or better yet, make an enquiry to speak to an expert.
This article covers the following topics:
Where can I transfer my pension to?
Before you decide where is best to transfer your pension fund you will need to make sure that the scheme that holds your pension currently will allow transfers out, you will also need to make sure that the scheme you’re hoping to transfer into allows transfers in, as there could be applicable admin charges.
It’s often possible to transfer a pension to the following scheme types…
A new employer’s workplace pension scheme
When we move jobs we usually leave a pension scheme with our old employer and start a brand new one with a new employer. Nowadays, more and more people are wanting to streamline their pensions to stay in control of their retirement income.
However, you may have a defined benefit pension scheme (like a final salary pension) so it is always prudent to seek advice from a pensions expert to make sure it is the best thing to transfer from your old pension scheme into your new workplace pension scheme.
A self-invested personal pension (SIPP)
A SIPP (self invested personal pension) is known now as a DIY (do it yourself) pension. By having a SIPP you are able to invest almost anything you want, making your very own pension choices and having the option to manage it yourself over time.
If you do not have the time, you are able to appoint an investment manager as a trustee to run your portfolio as you wish. SIPPs are geared more towards people who understand investments and investing.
Having a SIPP is more flexible than having a more traditional pension but there is also more risk and responsibility on you having to make investment choices yourself.
A Small Self-Administered Pension Scheme (SASS)
An SSAS (small self-administered pension scheme) is in the main a workplace/company pension scheme. Generally, an SSAS is set up by the company directors for themselves and other key or senior members of staff but can also be open to other employees.
Normally there are no more than 11 or 12 members in an SSAS. Contributions to an SSAS can be made by the individual and/or the company with both benefiting from tax relief.
Usually an SSAS is now the pension of choice for director-controlled companies due to its flexibility and tax breaks.
A Stakeholder Pension (SHP) scheme
A pension plan that is flexible but aimed at people that are not confident in managing the investments themselves.
If you were confident in managing your own investments, a SIPP could be a more viable option. The other upside of stakeholder pensions in the relatively low costs set out by the government where you can not be charged more than 1.5% per year for the first 10 years and no more than 1% per year thereafter. Due to the simplicity of the stakeholder scheme you generally only have the option of low or low-to-medium risk investment options.
A private pension scheme
Like SIPPs and stakeholder pensions, private schemes are another type of personal pension, a category of retirements that you arrange and pay into yourself.
Private pensions fall in between SIPPs and stakeholder plans in terms of their complexity. There are a wide range of funds to choose and investment strategies that you could employ, and the experts we work with can help you make the right choices here.
Why should I transfer my pension?
Where you should transfer your pension to will come down to the reasons behind your desire to do so in the first place. By understanding why you want to transfer, you’ll have a much better chance of transferring to the right pension scheme. Some of the more common reasons why people want to transfer from one to another could be:
- Your current pension provider does not offer the options you need
- To combine pension pots
- To switch to a scheme with lower fees
- To switch to a scheme which provides more income
- The level of risk does not match your appetite for it (will not apply to defined benefit)
- Your pension is not performing well (will not apply to defined benefit)
It may be that you have a variety of pensions from workplace pensions and personal pensions that you have accumulated over the years. We find many customers want to combine existing pensions to simplify the management whilst saving money on administrative fees.
It could be that you have got two separate workplace pensions and you have now got your own limited company. Now, you can make use of those funds to help purchase corporate premises, so in this case, it could make sense to transfer into an SSAS.
Could a SIPP be the right option?
You may have a few workplace pensions and a separate personal pension but you want to simplify the management along with being more tax efficient, and in this case it could be beneficial to transfer into a SIPP.
Where should I transfer my pension to if I’m starting a new job?
That will likely depend on the pension benefits your new employer offers. It may be that you have recently started a new job with a great pension scheme. In this case, it could make sense to transfer your old workplace or personal pensions into this.
Whatever your circumstance, when considering transferring and/or combining multiple pensions, you should seek specialist advice from an independent pension expert – like the ones we work with.
A pension specialist will be able to assess your current pensions and give you the best advice for your circumstances making sure you transfer into the right pension for your long term goals.
Speak to a pensions expert
Ultimately the decision on where to transfer your pension is up to you and should be determined by your circumstances. You should always seek out expert advice for a pensions expert for personalised and professional advice.
If you have questions and want to speak to an expert for the right advice, call us today on 0808 189 0463 or make an enquiry here.