How can I transfer pensions?

Recent changes to pension legislation now mean it’s easier than ever to transfer your pension to another provider, and a growing number of pension providers are adopting electronic transfers as an alternative to archaic methods that involve paper transfer forms and cheques. Placing your savings into another plan could prove more lucrative. Although, transferring could also become more complicated if you’re in a guaranteed benefit scheme – so you should always carefully weigh up the pros and cons before switching providers.

Reasons to transfer your pensions

Here are some of the reasons you might want to switch providers.

To simplify your finances

Transferring your old pensions - particularly into one plan - can make pension management much simpler. Rather than managing multiple pension pots, you’ll have everything in one place. You’ll be able to keep a close eye on your retirement savings, as you’ll be clear where everything is.

For better value fees

If you’ve been paying into an older style scheme, you may have been charged hefty management fees. With PensionBee, you can choose from a variety of pension plans with annual fees ranging from 0.50 to 0.95%.

Reasons not to transfer your pensions

Sometimes it can be better to leave your pensions where they are. For instance, if:

Your pension has guaranteed benefits

Some (mostly older) pension schemes have a final salary guarantee or bring other special benefits, and when you transfer out of them you might stand to lose these. Make sure you’re clued up on the difference between defined benefit and defined contribution pensions, and bear in mind that if your defined benefit pension pot is worth £30,000 or more you’ll need to take independent financial advice before you transfer. Check out our dedicated what is a pension page for a quick overview of the pension basics.

You face a hefty exit charge

The charges you’re paying will depend on the fee structure chosen by your pension provider. Reports suggest some 670,000 savers have faced exit fees up to 10%, which has led to the Financial Conduct Authority imposing a cap of 1% for savers over 55, and an exit fee ban on any new plans. At PensionBee, we do things differently. We charge a single annual management fee, which is taken directly from your pension pot.

The transfer process

You can transfer your UK pension pot into another registered UK pension scheme, or an overseas option if you’re moving abroad. There are certain restrictions around this though, and the website can provide you with more information.

For many UK savers, their retirement savings will be one of their largest financial assets, outside of owning a home. This makes pensions attractive to scammers. Fraudsters may impersonate you to access your account, or pressure you to transfer to an unregulated scheme where the money can be stolen from you.

As such, the Pensions Regulator has advised new measures over the years to improve financial security, especially during processes where money is moved (such as pension transfers and withdrawals). You can begin the transfer process by either contacting your old pension provider, or your new pension provider. Here are the three steps for transferring:

1. Providing information

While you’re invested with your old pension provider, they’re in charge of ensuring all transfers to other schemes are legitimate. As a minimum, your old pension provider will request the following to process your transfer:

  • Your information: name and address, date of birth, National Insurance Number.
  • Your new provider’s information: name and address, HM Revenue and Customs (HMRC) registration number, payment details, type of scheme, identity of the scheme administrator.
  • Your financial adviser’s information (if applicable): the firm’s name and address, Financial Conduct Authority (FCA) registration number, and permission from you.

Going through the transfer process (with any pension provider) may trigger some additional steps: from verification of identity, to requiring financial advice. These requirements can slow down the transfer process, but are designed to protect your interests and your assets.

2. Due diligence checks

Your old pension provider has a duty of care to ensure your transfer meets all regulatory requirements. Providers begin by looking for abnormalities in your transfer application and provided information. There are two checks to follow:

  • First check: is the new pension scheme on The Pension Regulator’s pre-approved list?

Some schemes are able to receive transfers without any further checks being required. Your new scheme provider must be either: a public service pension scheme, an authorised master trust, or a collective defined contribution scheme that has received authorisation to accept transfers.

  • Second check: is the new scheme a workplace scheme? Is the customer living overseas? Are they any red or amber flags?

These checks raise many questions. The guidance to providers is to take a risk-based approach to decision making, which can take time. It’s good practice to direct customers to the government’s own MoneyHelper website, as it acts as a standardised library of financial information for consumers.

If your old pension provider still has uncertainties about your new scheme, or your decision to transfer was made independently, then they’ll begin additional checks to verify the situation. If all checks don’t pass either an amber or red flag will be issued.

If an amber flag is found, the old pension provider will provide a MoneyHelper link so customers can book a session online or by telephone. Once the customer has attended this session, they’ll have a unique reference number. This must be provided to eliminate the amber flag and continue with the transfer. In cases where a red flag is identified, the old pension provider is required to refuse the transfer completely.

3. Final decision

Once all checks are completed, your old pension provider must make a decision: accept or refuse the transfer request. The majority of transfer requests are legitimate, after receiving the greenlight your providers will organise an exchange of funds. However, your old provider can refuse the transfer if a red flag exists or they have evidence that your new provider isn’t safe, but they can’t refuse if they simply believe you’d be better off invested with them. As a customer, you’ll be informed of their reasoning and have the capabilities of appealing this decision.

Transferring to PensionBee

If you’re planning on transferring to PensionBee, you’ll need to give us some basic pension information to get started - like a provider name or policy number. On average, switching to PensionBee typically takes around 12 weeks.

Not sure how to find your old pension details? Read our ‘how to guide‘. You can even tell us about your current employer pension, but we won’t usually transfer it to PensionBee until you move jobs or your employer stops contributing.

Other things to look out for when you want to transfer a pension

  • What is the reputation of your new provider? How do they fare when it comes to customer service?
  • How involved do you want to be in making investment decisions? With some plans you can choose your own investment funds, whilst others are a pre-picked mix of shares, bonds and cash.
  • How much are the fees of your old pension compared to the one you’re transferring to?
  • How easy is it to contribute to your new pension? What are the policies around contributions?

Transfer your pension to another person

It’s generally not possible to transfer your pension to another person, unless:

Ready to transfer?

You can use the pension calculator to set a retirement goal and see how you may be able to reach it. And you can set up regular contributions and make one-off payments quickly and easily from your online account. Plus, existing customers can download our app in the Apple App Store and Google Play stores and use it to access their real time pension balance with PensionBee.

Not sure how to find your old pension details? Read our ‘how to guide‘. You can even tell us about your current employer pension, but we won’t usually transfer it to PensionBee until you move jobs or your employer stops contributing.

Join PensionBee now and take control of your pension savings.

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.

Last edited: 06-04-2024

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