Pension transfer options
Transferring pensions to a single provider can often make good financial sense – and may make it easier to plan for retirement.
What is a pension transfer?
A pension transfer involves moving a pension from one provider to another.
The majority of pension schemes can be transferred. For example, you could transfer your old pension(s) to personal pension such as a SIPP (self-invested personal pension).
Pension transfer options
If you’ve had more than one job in your lifetime, it’s likely you’re a member of more than one pension scheme. You could consolidate your pensions by transferring them individually into one scheme. This might make it easier to track and manage your finances.
Alternatively, you may simply wish to switch pension providers if you feel you could get a better deal elsewhere.
Reasons to transfer pensions
Transferring your pension(s) could be beneficial for a number of reasons.
- You could make it easier to manage your finances by consolidating your pensions into one scheme.
- Transferring to a new pension scheme might give you greater control over your drawdown income. Many older pension schemes have restrictive rules about accessing your money – such as capped drawdown which limits the amount you can withdraw annually.
- By transferring to a personal pension, such as a SIPP, you could open up more investment options. This would also allow you to manage your own investments. The ii SIPP allows you to choose from more than 40,000 investment UK and global investment options.
- You could reduce the cost of your fees.
For example, while many pensions charge a percentage fee, the ii SIPP charges a low, flat fee. Independent research by The Lang Cat has shown this could save you thousands.*
*Analysis shows you could be better off by £94k over 30 years of investing in an ii SIPP due to our low flat fees. This is just for illustration if all other factors were the same. The advantage of lower flat fees over time means that you could be significantly better off in the long run. By how much will always depend on your personal circumstances. More about our analysis
Things to consider before transferring a pension
Transferring your pension may not always be beneficial. There are a number of factors you should consider before transferring.
Guaranteed /safeguarded benefits
Some schemes offer guarantees and benefits – such as guaranteed annuity rates, the option to take more than 25% tax-free and access to benefits before you reach 55. By transferring to a new scheme, you could lose these benefits.
Before you transfer from your current workplace pension, check your employer will still contribute as much to your new scheme. You might be better off transferring your old pensions, but keeping your existing workplace pension.
Some schemes charge exit fees. The fee may outweigh the benefits of moving – particularly if you transfer a small pension.
Defined benefit schemes
Defined benefit pension schemes offer a guaranteed annual income in retirement. It is rarely beneficial to transfer out of a defined benefit pension as you will lose a guaranteed income for life.
We recommend speaking to a financial advisor before transferring any kind of pension.
Transferring a pension to ii
You can transfer a pension to our SIPP in three simple steps.
You will need: your National Insurance number and details of the pension(s) you want to transfer.
Open an ii SIPP
Open an ii SIPP if you do not already have one.
Start your online transfer
Our online process is quick and easy.
We will take it from there
We will work with your current provider to complete the transfer, and keep you updated regularly.
Please remember, SIPPs are aimed at people happy to make their own investment decisions. Investment value can go up or down and you could get back less than you invest. You can normally only access the money from age 55 (57 from 2028). We recommend seeking advice from a suitably qualified financial advisor before making any decisions. Pension and tax rules depend on your circumstances and may change in future.
What pensions can I transfer to interactive investor?
You can transfer the following types of pension into our SIPP:
- Personal Pension Plans
- Pensions in drawdown
- Other SIPPs
- Some workplace pensions
- Stakeholder Pension Plans
- Frozen pensions
- Retirement Annuity Plans
- Executive Pension Plans (EPPs)
- Occupational Money Purchase Plans
- Small Self-Administered Schemes (SSAS)
- Defined Benefit Occupational Pension Schemes
- Some Recognised Overseas Pension Schemes
In some cases, we will accept the transfer of defined benefit pensions.
If you wish to transfer a defined benefit pension with a value over £30,000, legally you must seek confirmation from a pension transfer adviser that the transfer will be in your best interests.
We still recommend you seek independent professional advice before you transfer if the value of your defined benefit pension is less than £30,000.
How long will my transfer take with ii?
If you transfer your pension as a cash payment, it usually takes between 2 – 6 weeks to complete. For cash transfers, you must sell your existing stocks before transferring.
If you’d like to keep your existing investments, the transfer will take longer. It usually takes 8 – 12 weeks but it depends on the type of investments you hold.
The length of time the transfer takes will also be reliant on how quickly your current provider works with us to complete it.
What are pension transfer charges?
Some providers charge a fee to transfer your pension and these fees can vary.
At ii we do not charge either transfer or exit fees. However, your existing provider may, so it is important to check before you transfer.
Pension transfer FAQs
Should I merge my pension pots?
Whether or not it will be beneficial for you to merge your pension pots depends on what types of pension you have and your priorities.
If you have a final salary based defined benefit scheme, transferring your benefits may not be beneficial for you. You will lose the guarantee of a regular income for the rest of your life.
Merging your pension pots might be a suitable option if you have multiple defined contribution schemes (all personal pensions and most workplace schemes).
If you have a number of pensions, you are likely to be charged a fee for each one. Merging into one scheme should reduce your costs. It will also reduce the amount of paperwork you have and make it easier to manage your money.
We strongly recommend speaking to an advisor if you are unsure about transferring your pension(s).
Does it cost money to transfer a pension?
Whether it costs money to transfer a pension depends on your provider. Some providers do charge transfer fees while others do not. Check if, and how much, you will be charged before transferring.
It is free to transfer pensions into an ii SIPP, but you may be charged by your current provider for transferring out.
Do I need a financial advisor to transfer a pension?
You are not always required to speak to a financial advisor before transferring a pension. However, we recommend doing so.
It is a legal requirement to seek qualified financial advice before transferring a defined benefit pension worth £30,000 or more. You will need written confirmation from them that it is in your best interest before you can transfer.
Is it worth transferring a small pension?
Transferring a small pension could reduce your overall costs. It could also make managing your pension easier.
However, it may not be worthwhile if your current provider charges large exit fees. Even with a small pension, there may also be benefits – such as the age you can access it and how much can be taken tax free – which may be worth keeping.
Some providers also require a minimum transfer value to accept a transfer. There is no minimum transfer value requirement if you are transferring to the ii SIPP.
Get more from an ii SIPP
We don’t believe in charging a percentage fee that goes up as your investments grow.
Our award winning SIPP gives you fixed, transparent pricing, with no percentage-based fees. So you can watch your portfolio grow while your costs stay the same.
Open a SIPP and pay no SIPP fee for six months. Following the offer period, the ii SIPP fee is only £10 a month. Terms apply