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A pension transfer is the process of combining a pension from one or more providers into another pension plan.
There are many reasons people transfer pensions. Someone may want to reduce their fees. Others might want to make it easier to manage their pensions by having them in fewer places.
On this page, we’ll cover topics such as:
- Why you would combine pensions
- Who can transfer a pension
- How to transfer your pension
- How long does it take to transfer a pension
- Do you need to transfer an entire pension plan
- How much does it cost to transfer a pension
- Can you transfer a pension to an overseas provider
- Transferring your pension to someone else
Why combine pensions?
Many people decide to combine their pensions as having them in a single plan can have benefits compared to having them spread around. Here we explain what some of the benefits could be.
Less admin
The average person has around 11 jobs in their lifetime, so the number of different pension plans can build up over time. With all these different pension plans, it can be tricky to keep track of them all. By moving to one plan, it’s easier to see the pension’s value and how it’s expected to change over time.
Lower management charges
Some of your pension providers may charge different management charges. By transferring from one provider to another, you may be able to change to a pension plan that charges less compared to the cost of your existing management charges. But before moving, check with any provider what the charge would be once you’ve combined your pension plans. You should also check if any of your current pension schemes have exit penalties, as this might help you decide which one to move from.
Better investment options
Some people want to choose how they invest their pension. By combining them into a chosen plan, they can pick a plan with better investment options. For example, some people may prefer a pension plan with more sustainable investments.
Easier access to funds at retirement
By combining pension plans, it could be easier to get your money once you retire as not all providers let you convert your plans into a drawdown pension.
Who can transfer a pension?
Anyone can transfer a pension, but some pension providers have rules that restrict certain types of transfers without a financial adviser being involved. For example, some providers won’t allow you to transfer if you’re planning to start taking your pension soon or if you have already started to take money from it.
How to transfer your pension
There are a few things you need to do before you start the process of transferring your pension.
- Find your pensions.
- Get your pension details.
- Work out your pension value.
Find your pensions
The average person will have many different pension plans throughout their career. So it's not unusual to have a few from old jobs that you're not keeping track of. It might be that you don't know it's value, but you may also be unsure who the pension scheme is with.
To find your pensions, you can use the Government’s free Pension Tracing Service. And for further advice on this, read our guide to tracking down your lost pensions.
Get your pension details
As well as finding out where your pensions are and who they're with, you'll need your pension plan numbers. These are on most pension statements, but if you can't find them, speak to your provider and they'll help you out.
Work out your pension value
The last thing to sort before transferring your pension is to work out what your total pension plan is worth. After figuring this out, consider how much you want to move, as you don't need to transfer your entire pension plan.
You might also want to think about the fees and charges for moving. If you're unsure how to work this out, we'd recommend speaking with a financial adviser.
How long does it take to transfer a pension?
Pension transfers can take between 4 and 12 weeks. The exact time will depend on things like how complicated the pension plans are and how quick the other providers are to respond. It could take longer if you need to get financial advice or provide documents.
Do you need to transfer an entire pension plan?
You don’t need to transfer your entire pension plan in one go. In fact, some pension schemes will only let you transfer part of your pension. Check with your provider to see how much of your pension plan you can move when making a transfer. If you get financial advice, your adviser should also be able to help with this.
How much does it cost to transfer a pension?
The average cost of transferring your pension is 2% to 3% of the amount you’re transferring*. There are a few different fees that make up this figure, including:
- exit fees
- set-up fees
- financial adviser fees.
For more details on these charges, read our advice on the cost of pension transfers.
Can you transfer a pension to an overseas provider?
Yes, you can transfer your pension to an overseas provider. The provider must be a Qualifying Recognised Overseas Pension Scheme (QROPS) registered for us to make the transfer. To see if you can make this type of transfer, you can look at the full list of registered providers.
Transferring your pension to someone else
Some people want to transfer a pension to a loved one, but in most cases, this isn’t possible. This is because a pension is personal to you, and there is no legal structure in the UK to move it to another person. You can nominate someone to receive your pension if you pass away.
The only time when someone can transfer part of their pension is if they divorce or end a civil partnership. And even in these cases, the pension is part of the overall settlement rather than something separate.
If you've got questions about pension transfers, we recommend speaking with a financial adviser.