Transferring a pension should be a simple process, however this isn’t always the case. At PensionBee we want to make transfers as easy as possible, but unfortunately not all providers share our vision. When we looked at pension transfer times across the industry, we found that some providers take over two months to complete a transfer!
As soon as we know the details of your pension we’ll try to do all the legwork for you, however there are a few things you can do to speed up the process. Here are eight questions to ask both your pension provider and yourself to make your transfer quicker.
What type of pension do I have?
It’s likely you’ll have either a defined contribution or defined benefit pension. It’s important to find this out, as it will have an impact on your transfer.
Transferring a defined contribution pension should be fairly straightforward. However if you’ve got a defined benefit pension, you’ll be required to seek independent financial advice if it’s worth over £30,000, which can delay the transfer.
Will I lose any benefits or face charges when I transfer?
Pensions can sometimes come with guarantees, known as ‘safe-guarded benefits‘, as long as you remain in the scheme. The level of reward will vary, but it’s important to understand what you’ll lose before committing to transfer your pension. If you’re confused by any of the safe-guarded benefits that come with your pension, you should ask your old provider for more information.
When leaving a scheme early, you may be faced with a pension transfer charge, which is more commonly referred to as an ‘exit fee’. These can vary in size, and although it would impact the transfer value, the pros of moving to your new provider might outweigh the cons.
At PensionBee, we’ll always tell you if we find an exit fee of more than £10, or any safe-guarded benefits that you’d lose. Please be aware though that we’re reliant on clear information from pension providers, so we won’t always be able to tell whether such features exist. We also won’t check certain policies which are considered very low-risk, including those where you ask us to waive our usual checking processes.
Does my new provider need to send a letter of authority?
A letter of authority (LOA) shows providers that you’ve given PensionBee authority to request pension information on your behalf. Although we’re sometimes able to request the transfer straight away, if we need any information about your pension, we’ll need to send an LOA first.
Finding out if we’ll need an LOA, and where to send it, can help to fast track your transfer. Some providers have multiple departments, so knowing the best postal or email address to use cuts out a lot of the back and forth between us and your provider.
Is my personal information up to date?
The personal details you’ve given PensionBee will need to match the information held by your current provider when requesting a transfer. So if you’ve moved house or got married since opening the pension, you’ll need to update this information with your old provider beforehand.
If any details don’t match up, your provider won’t release any information
If any details don’t match up, your provider won’t release any information about your pension. You might then be asked to send additional paperwork and proof of identification to your provider so they can verify your identity.
Is my pension active?
Before transferring a pension, all personal and employer contributions will need to have finished. If the pension is still receiving contributions, these could be lost or delay the transfer. Most providers will insist on three months of no contributions before accepting a transfer request, so it’s worth checking this sooner rather than later. With PensionBee you can add an active pension to your account, and as soon as you stop receiving contributions we can initiate the transfer.
Do I have all of my policy information?
When tracing a pension, any information you’re able to provide us at the moment of sign up is a massive help. This could be your provider’s name or a policy number. Any information you can dig out will go a long way to finding your pension and helping us complete the transfer faster.
Do you accept electronic transfers?
Although paper transfer forms are less common now, some providers still use them. In fact, around 30% of the transfers we process require us to use paper transfer forms. Not only is this bad for the environment, it slows down your transfer and carries the risk of information being lost in the post too.
This allows for a safer, more efficient and environmentally-friendly transfer of your pension
At PensionBee we do our part by using the electronic transfer platform Origo Options. This allows for a safer, more efficient and environmentally-friendly transfer of your pension. If your provider accepts electronic transfers, your money should be moved in no more than two weeks. However, if your old provider refuses to use Origo and insists on paper transfer forms, the transfer can take up to two months. These delays allow your provider to earn more in fees and may even put you off transferring altogether.
Is there anything else I can do?
With most transfers, having your policy information and authority to act on your behalf is enough. However, some providers will have additional requirements. This is particularly common among providers who still use paper transfer forms. Finding out if you’ll need to send proof of identification or additional paperwork, can ensure a smoother transfer.
Speaking to your provider both before and during the transfer means you can avoid any blockers, and ensure there aren’t any hiccups along the way.
Transfer your pensions to PensionBee
At PensionBee we’ll always keep you in the loop about your transfer and aim to make the process as simple as possible. You can sign up in just a few minutes, and you’ll be assigned your very own BeeKeeper should you have any questions throughout your pension journey with us.
Risk warning: As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.