How do I transfer my pension?
3 Apr 2024
Understanding Pension Transfers
Transferring a pension is the process of moving your pension savings from one provider to another. This could be to consolidate multiple pensions into one or switch to a provider that better suits your needs. While the process is straightforward today, it's essential to understand a few key points about how pension transfers work.
What Does the Transfer Process Involve?
Assess Your Current and New Pension Plans: Before initiating a transfer, check both your existing and new pension plans. Consider fees, investment options, and any specific rules regarding transfers.
Selling Your Investments: Your current pension provider will need to sell your holdings to convert your pot into cash. This amount is your pension transfer value.
Transferring Your Funds: This cash is then moved to your new pension provider where it will be re-invested according to your new plan.
Things to Check Before a Transfer
Pension Type: Know the kind of pension you have. For example, transferring a defined benefit pension can be complex and usually requires advice from a financial advisor if it's worth more than £30,000.
Provider Compatibility: Confirm that both your current and new providers handle transfers. Setting up your new pension account prior to initiating a transfer is crucial.
Time to Reflect: You normally have a 30-day window to cancel a transfer, but be wary of any potential reductions in your fund's value during this period.
How Long Does a Transfer Take?
The duration of a pension transfer can vary. While digital transfers may only take a few weeks, traditional paper-based transfers might extend to several months. Penny processes pension transfers digitally, and the process usually completes within about 4-8 weeks.
Why Transfer with Penny?
Penny makes pension transfers easy:
No Transfer Fees: We handle transfers at no cost to you, regardless of the number of pensions or the size.
The Penny App: The entire transfer process is managed through the Penny app, making the process quick, clear, and paper-free.
FCA Regulated: Assurance that your pensions are in safe hands.
Important Points to Consider
When considering a transfer, always compare fees, any potential loss of benefits, and the suitability of investments.
Note that Penny does not handle transfers of defined benefit pensions or active pensions with ongoing employer contributions.
Always remember, as with all investments, your capital is at risk.
Pension transfers don't have to be complicated. With modern technology and a reliable provider like Penny, the process should even feel automatic. If you ever need more information on a pension transfer, please talk to our award-winning member support team.
