Key considerations before transferring your pensions.
Transferring and consolidating pensions can be a good idea if you're looking for a simple way to manage your finances. However, before you do this there are certain things you should check for, as in some circumstances it may be in your best interest to leave your pension investments where they are.
Transferring your pensions won’t change the tax benefits you receive, but if your pensions have other benefits that you’re entitled to it could impact these, so it’s important to consider whether transferring is right for you. You should also remember tax and pension rules can and do change, and their value depends on your circumstances.
Below are some of the key things you should consider but it’s not an exhaustive list. You should take into consideration your personal circumstances and objectives, and the characteristics of your current pension plan. Your current pension plan provider/administrator will be able to provide information about your existing pension plan if you need more help. Before making the decision to transfer you should consider your existing options – check how well your existing pension is performing, what fees you’re paying and whether you have a choice of investments that suit you. Also, check whether you’ll lose any valuable benefits (see more on this below). If you have the investment choices you’re looking for, benefits and low fees, then you may be better off by staying where you are.
We won’t accept transfers from defined benefit schemes (sometimes known as final or average salary pension schemes), and we won’t transfer a workplace pension where your employer is currently contributing. If you are considering transferring in pensions, please ensure that you are not giving up valuable benefits.
You should note that once you start the pension transfer process your existing provider may not accept you back.
|
Costs and Penalties
Is the new plan more expensive than your existing plan? Does your current plan provider impose exit penalties or charges if you transfer or stop making contributions?
The benefits of your new pension arrangements and service should outweigh any increase in cost to you or be worth the fees/penalties incurred. You should make sure that the transfer is not going to disadvantage you financially.
Find out if there are any transfer charges or exit penalties from your existing provider if you decide to move your pension. These could be penalties or charges that relate straight to the pension, or to the underlying investment.
Before you transfer, you need to ensure that transfering to the new pension arrangement is overall better for your needs and circumstances.
Summary of our services and what we check for
What is the service and what do we check for? / Checks carried out by Profile | Transfer only | Find, Check & Transfer |
---|---|---|
SERVICE | ||
One-off initial fee | None | None |
Find pension and detailed policy information | No | Yes |
Arrange the transfer of your pension | Yes | Yes |
CHECKS CARRIED OUT BY PROFILE | ||
Guaranteed annuity or guaranteed minimum income (e.g. GMP) | Yes* | Yes |
Guaranteed annuity rate | No | Yes |
Guaranteed minimum future value | No | Yes |
Guaranteed growth rate | No | Yes |
Enhanced or protected tax-free cash entitlement | No | Yes |
Exit penalties on transfer | No | Yes (if > £50) |
Life insurance | No | No |
Exiting plan fees and charges | No | No |
Exiting plan loyalty bonuses | No | No |
Exiting plan performance and/or bonus history | No | No |
Exiting plan risk profile and equity exposure | No | No |
Exiting plan projected future value | No | No |
Exiting plan access to FAD | No | No |
Advised recommendation whether to transfer | No | No |
Investments can go down in value as well as up, and you may get back less than you put in. See our full risk disclosure for details.