A pension transfer is when you move your pension savings from one pension company to another. Bringing your pensions together in this way is sometimes called 'combining your pensions' or 'pension consolidation'.
You may be able to transfer some or all of your pension savings into your Royal London pension, depending on the type of plan you've got with us.
We’ve put together some key information below - read on to learn more about pension transfers and decide if it’s right for you.
Why combine your pensions?
Keep it simple
Most people end up with more than one pension, especially if you work for different employers over the course of your career. Having your pension savings in one place can make it easier to keep track of them.
Take a minute to think about how many jobs you've had in your lifetime. The chances are, each of them came with a workplace pension, so you might have more than one pension pot with a number of different providers.
If you have pensions with other providers, they should send you a yearly statement with the key information about your plan. But if you’re not sure what you’ve got, you can use the government’s free pension tracing service to track your old pensions down.
Before you continue, you should make sure you understand if you can transfer your pension and if a transfer is right for you. It’s important to consider all the pros and cons before you decide what to do.
There's no guarantee that combining your pensions will give you a higher income or bigger pension pot. Your pension is invested, it's value can go down as well as up and you could get back less than you invested.
Watch our video to understand what a pension transfer might mean for you and to help you make an informed decision.
Today I’m going to provide information to help you decide if transferring your pension savings to a new plan with Royal London is right for you.
What we’ll talk about today:
Transferring your pension savings
Supporting you in making the right decision
About Royal London
You can transfer pension savings you’ve built up in previous pots to us. This is called ‘transferring your pension’.
These won’t automatically transfer across when you start a new Royal London pension but the good news is, you can transfer at any time.
It can make things easier to manage by combining pension savings but typically, there are certain things to consider before deciding to transfer. Everyone’s circumstances are different and transferring your pension savings has both risks and benefits.
That’s why, it’s important to understand the advantages and disadvantages of a pension transfer by weighing up your options, comparing plans and considering all the risks and benefits to make sure it’s right for you.
And if you’re unsure, we recommend you speak to a financial adviser.
There’s a lot to think about when it comes to transferring your pension savings. While there could be benefits in transferring, it’s important to take time to understand the risks.
The following slides should help you get comfort in your decision as we talk through the key things to look out for.
Does your plan with your existing pension provider have any features or benefits that you could lose if you decide to transfer?
Depending on how long your plan has been active, you may not have any of the features or benefits listed. But it’s always wise to check because once you transfer, any features or benefits attached to your plan may not be replaced.
Look out the plan details from your current pension provider – if you don’t have them to hand, you can request these from them or you can ask them to provide this information. And then use this list to check if your plan has any of the following features or benefits:
Guaranteed Annuity Rate (GAR)
This is a guaranteed minimum level of income that a pension provider will pay when you start taking your pension savings. It will generally be higher with your existing provider than the rates available in the market when you retire. And because this is such a valuable benefit you should seek financial advice before making any decision.
Some pension schemes reward customers with a loyalty bonus after a set number of years. This could be paid by giving back some of your annual management charge or as a lump sum when you come to take your pension savings, depending on the scheme. Usually if you choose to leave a pension scheme that has a loyalty bonus you’ll lose this benefit so it’s important to consider the impact this may have on your retirement planning and seek advice.
Protected tax-free cash
Tax-free cash is the money you can take as a tax-free lump sum when you begin to take your pension. It’s currently set at 25% of the fund. Older pensions may allow you to withdraw a higher percentage of tax-free cash. In some circumstances, you can transfer this benefit to your new pension. This ring-fenced amount is called Protected tax-free cash. If you choose to transfer your pension savings, it may be possible to keep this entitlement.
Protected pension age
Currently age 55 is the earliest you can start taking your pension. Your existing provider may allow you to take your pension when you’re younger than 55. This is called your protected pension age and it’s possible to protect this benefit in some circumstances.
There are a range of features and benefits an employer may add to a pension scheme. You should speak to the pension provider of any pension pots you’d like to transfer to get more information about any benefits you have on your plan.
So what is an AMC and why does it matter?
All pension providers apply a yearly charge for managing your plan. This is known as the Annual Management Charge or AMC.
It’s taken automatically each year from the value of your pension savings.
It’s worthwhile taking the time to understand and compare plan charges because if you choose to transfer your pension savings into a new plan it could mean you pay higher or lower charges.
There's no extra cost to transfer your pension savings into a new plan with us but it’s worthwhile contacting the pension provider of any pension pots you’d like to transfer to find out if they’ll charge you for moving your savings.
If you decide to transfer your pension savings into a new plan, you could benefit from a wider choice of investments. Investments which have a wide range of assets classes like equities, property and bonds can help reduce the risk of any market falls as these can be spread to help your investments cope with the market’s ups and downs.
You can choose your own investments and if you decide to do this, it’s important to think about how much risk you're willing to take. Higher risk investments can help your money grow more but there's also a greater chance of losing money. And with lower risk investments, your money may not grow as much as you want it to.
It’s important to regularly review your investment options to make sure they’re meeting their overall objectives and are giving you the best returns for the level of risk you are comfortable with. Each fund’s performance has a benchmark: a gauge against which the performance of the fund can be measured. It’s important to remember that past performance is not a guide to future performance, so you need to regularly review performance. This is something you can do yourself, get a financial adviser to do or sometimes the pension provider will do this on your behalf.
At Royal London if you’re invested in our Governed Range, we regularly review this. And if our experts decide that the mix of assets needs to be adjusted, it happens automatically on your behalf, you don’t need to do anything. This ongoing governance comes at no extra cost to you.
To explore what your existing pension savings might be worth, based on the investment choice and chosen retirement date for your Royal London plan, you can request a personalised illustration from our online service.
By keeping a close eye on your pension you can check it’s doing what you need and make sure it remains suitable for you, your needs and your future.
It’s important to understand the advantages and disadvantages of a pension transfer as it may not be in your best interests to transfer your pension savings to us.
If you’re not sure transferring is right for you, you should speak to a financial adviser. You can find one in your area by visiting royallondon.com/find-a-financial-adviser
Advisers may charge for their services – though they should agree any fees with you upfront.
By taking the time to understand all of the things we’ve talked through today, should help you make a decision that’s right for you.
Here’s some facts to help you get to know us better:
We’re a mutual
We’re the UK's largest mutual life, pensions and investment company. And as a mutual, we’re owned by our members. So when we say we put our customers at the heart of our business, we really mean it - looking after your best interests is what we’re all about.
We'll aim to give your pension savings an extra boost by adding a share of our profits to your plan each year. There’s no guarantee we'll be able to award ProfitShare every year but if we do well, so do you. We’ve call this your ProfitShare.
Five star service
When it comes to service, we think you deserve the royal treatment. We put people at the heart of everything we do – and underpin our personal service with technology. That’s why we’ve won five stars for service for the last 13 years in a row.
Considering transferring your pension savings to us?
We've put together some examples. These will give you an idea of what your pension savings could be worth at retirement after a transfer.
Here are some of the things to look out for
Most pension plans will have charges for managing your pension savings. Look at how the charges on any plans you want to transfer compare with your Royal London plan. You may also be charged an exit fee by your previous provider or for any financial advice you receive.
Different providers offer different investment choices, and some might have a wider range to choose from than others. At Royal London, our innovative range of investment options has been designed specifically with pensions in mind.
When you save into a pension your money is invested. We aim to grow your savings, while also making a positive impact on our society and environment - to help you retire into a future worth living in.
Your retirement options
If you decide to transfer your pension savings into a new plan, you could benefit from a wider range of retirement options when it comes to taking your pension savings.
Do I need financial advice to make a transfer?
There are some situations where you must get financial advice before making a pension transfer. These are if you have:
- a defined benefit pension worth more than £30,000 and want to transfer to a defined contribution (DC) pension
- a DC pension worth more than £30,000 with a guarantee about what you'll be paid when you retire (also known as a Guaranteed Annuity Rate, or GAR) and will lose this benefit by transferring.
This legal retirement is to protect you and make sure that you fully understand the advantages, disadvantages and risks of transferring.
Even if your pension is worth £30,000 or less, if you’re not sure if making a transfer is right for you, you can speak to a financial adviser. In fact, we’ll always ask you to get advice if you’re thinking about transferring from a DB scheme.
An adviser can help:
- Understand your needs
- Discuss potential solutions
- Draw up a short list of options and providers
- Highlight the pros and cons
- Make a recommendation.
Advisers may charge for their services – though they should agree any fees with you upfront.
Requesting a transfer pack on our mobile app
In this short video we'll show you how our app can be used to request a transfer pack from us if you're thinking of transferring a pension to us.
Before we start we'll help you understand what you need to think about before we can do anything. Transferring may not be in your best interests as you may lose valuable benefits which can't be replaced. We also recommend you speak to a financial adviser before making a decision.
To start, you should click request a transfer pack.
We then have some helpful guides for you. So you know what to expect, what happens and what we'll be doing.
For us to be able to send a transfer pack out, all we need is your plan number and the name of the provider for the pension you're transferring from.
You'll also see the detail of what information we might request from the other provider.
You then just need to click the agreement for us to request more information.
To end, there's a quick thank you from us. We'll then send you a transfer pack in the post and be in touch with you if we need any more information.
Get in touch
If you've a workplace pension plan that isn't available on the app you can email or call us on 0345 600 6042 to talk about your options. If you've an individual pension plan you can email or call 0345 646 1693.
If you took out your Royal London pension before 2004 or with a different provider that’s now part of Royal London, you can talk to us about transferring your pension by calling 0345 605 7777.
Frequently asked questions
What is a pension transfer?
What does pension transfer value mean?
How do I compare my pension plans?
Does it cost anything to transfer my pension?
Transfers in: Royal London don't charge to transfer your pension savings from another provider. But your current provider may apply an early exit charge to your plan. It's best to get advice from a financial adviser to make sure a transfer is in your best interests. The adviser will charge for this, although the charge can be taken from your pension savings.
Transfers out: Royal London don't charge to transfer your pension savings to another provider. But we may apply an early exit charge to your plan.
Can I transfer my pension to Royal London?
If you’re an existing Royal London pension customer, you have the option to transfer other pensions to us. While we'd love to accept all pension transfers, there are some types of plans or plans with certain benefits that we can't accept. To find out more about them, watch the Weighing up your options video above.
Can I transfer part of my pension to another provider, rather than the whole thing?
What plan types can transfer to Royal London using our mobile app?
Customers with a Royal London Retirement Solutions plan can use our app to start a transfer. Any customers with a Continuation plan or an Individual plan (Pension Portfolio/Income Release) don’t currently have access to this facility. Instead you can email or call 0345 600 6042 to talk about your options. If you took out your Royal London pension before 2004 or with a different provider that’s now part of Royal London, you can talk to us about transferring your pension by calling 0345 605 7777.
How long will my pension transfer take?
This depends on the type of pension you are transferring into and how many pensions you are transferring. For initial transfer application requests our current processing time is between 7 and 10 working days, but this can vary depending on complexity of the transfer and Royal London having all the information required. If your transfer request has prompted discussions with your current pension provider, based on our experience these requests can take anything from 5 – 90 working days. We'll keep you updated at each step of the way.
What can I do if I leave my employer?
- Continue to make contributions into your plan. Remember that the contributions your employer makes will stop.
- Stop making contributions and leave the pension savings you've built up invested in your plan.
- Transfer the pension savings you've built up to another pension plan. Transferring may not be in your best interests as you could lose valuable benefits which can’t be replaced. You should speak to a financial adviser before you make a decision.
Can I transfer out of my existing Royal London pension?
Can I transfer my pension to an overseas provider?
What's a defined benefit pension?
A defined benefit or final salary pension, is a pension scheme where your pension is based on several factors like your pensionable service and pensionable salary. When you take your benefits, the payments are guaranteed to be paid in the future. The scheme rules may also provide for the payments to increase in future and for a pension to be paid to dependants on your death.
What's a defined contribution pension?
A defined contribution, or money purchase pension scheme is built up through your own contributions, employer contributions and tax relief from the government. Defined contribution schemes give you an accumulated sum when you retire that you can use to secure a pension income either through taking cash, buying an annuity, or opting for income drawdown.
What does AMC stand for?
For defined contribution schemes, whoever your pension is with, will apply a yearly charge for managing your plan. This is the annual management charge or AMC. It’s taken automatically from the pension savings you’ve built up. We won’t charge you anything on top of the AMC for transferring your pension savings to us. For defined benefits schemes, the charges are built into the contributions paid.
What's a Guaranteed Annuity Rate (GAR)?
Your plan may include a guaranteed rate at which you can buy an annuity with your pension savings. A guaranteed annuity rate is usually better than rates available in the market. And because this is such a valuable benefit you should seek financial advice before making any decision. We can’t accept transfers from plans with a GAR.
What's a loyalty bonus?
Some pension schemes reward customers with a loyalty bonus after a set number of years. This could be paid by giving back some of your annual management charge (AMC) or as a lump sum when you come to take your pension savings, depending on the scheme. Usually if you choose to leave a pension scheme that has a loyalty bonus you’ll lose this benefit. We can’t accept transfers from plans with a loyalty bonus.
What's protected tax-free cash?
Tax-free cash is the money you can take as a tax-free lump sum when you begin to take your pension. It’s currently 25% of the fund. Older pensions may allow you to withdraw a higher percentage of tax-free cash and in some circumstances, you can transfer this benefit to your new pension. This ring-fenced amount is called protected tax-free cash. If you choose to transfer your pension savings, it may be possible to keep this entitlement, we'll check and let you know.
What's a protected pension age?
Age 55 is the earliest you can take your pension. This is your pension age. Your previous pension may allow you to take your pension when you’re younger than 55 - this is called your protected pension age. It’s possible to protect this benefit in some circumstances. We'll check this and let you know if yours is protected.