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Pension transfer options

pensions & retirement

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.*
 

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. 

Employer contributions

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.

Exit fees

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. 

1

Open an ii SIPP

Open an ii SIPP if you do not already have one.

open a SIPP

2

Start your online transfer 

Our online process is quick and easy.

log in & transfer

3

We will take it from there

We will work with your current provider to complete the transfer, and keep you updated regularly.
 

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
  • Stakeholder Pension Plans
  • 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. 

Tracking and transferring lost pensions

If you need help finding a lost pension, visit the government’s pension tracing website . It will help you find the contact details of a lost pension scheme.

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

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). 

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.

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. 

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

The ii SIPP is aimed at clients who have sufficient knowledge and experience of investing to make their own investment decisions and want to actively manage their investments. A SIPP is not suitable for every investor. Other types of pensions may be more appropriate. The value of investments made within a SIPP can fall as well as rise and you may end up with a fund at retirement that’s worth less than you invested. You can normally only access the money from age 55 (age 57 from 2028). Prior to making any decision about the suitability of a SIPP, or transferring any existing pension plan(s) into a SIPP we recommend that you seek the advice of a suitably qualified financial adviser. Please note the tax treatment of these products depends on the individual circumstances of each customer and may be subject to change in future.