How can I transfer my pensions?

Recent changes to pension legislation now mean it’s easier than ever to transfer your pension, and placing your savings into another plan can prove more lucrative. Equally though, transferring won’t always make sense – particularly if you’re in a guaranteed benefit scheme – and you should carefully weigh up the pros and cons before switching.

The transfer process

The logistics of actually transferring your pension are really pretty simple, and some providers will even do the legwork for you – PensionBee for one. Alternatively, you can tackle the task yourself by telling your current provider that you want to switch, but do bear in mind that you’ll need to check if:

  • Your existing pension scheme allows you to transfer some or all of your pension pot
  • The scheme that you’re transferring into will accept the transfer

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 Gov.uk website can tell you more.

Reasons to transfer your pensions

Now that we’ve outlined the transferring basics, let’s look at some of the reasons you might want to switch provider.

Control

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.

Value

If you’ve been paying into an older style scheme you may have been charged hefty management fees. With PensionBee you can opt for either a Tracker, Tailored or Future World plan with our annual fees ranging from 0.5 to 0.95%.

Reasons not to transfer your pensions

Equally though, 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 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

Some older pension plans have high exit charges, sometimes more than 10% of your total pension savings. The good news is that the government is set to crack down on these excessive fees though, so you might want to hold off transferring until these new caps come in.

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 pensions to PensionBee.

With PensionBee you can manage your retirement saving online in one place, and use the pension calculator to set a retirement goal and see how you may be able to reach it. You can set up regular contributions and make one-off payments quickly and easily from your online account.

Join PensionBee now and take control of your pension saving.

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: 07-11-2016

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