Pension Switching and Consolidation
Make your pension work harder
Understanding whether you will benefit from a pension transfer can be very complex and you should always receive professional advice. Everybody’s circumstances are different, so you won’t necessarily benefit from a pension transfer just because other people you know are transferring their pensions to new schemes. But there are situations where it does make financial sense to transfer your pension to a different plan.
Doing this ends your membership of the original pension scheme.
Understanding whether you will benefit from a pension transfer can be complicated and you should always take advice from an independent financial adviser before arranging a pension transfer. In this section, we’ll explain how pension transfers work, what the main rules are and what you need to think about if you’re considering transferring one pension to another. We’ll also look at some common questions about pension transfers.
- Many individuals now find themselves with outdated, overpriced pension contracts.
- It may be possible to transfer to a cheaper plan with the same provider.
- Investment returns on many pension plans have fallen well short of what has been achieved in the open market.
Understanding whether and if you would benefit from a pension transfer can be complicated and you should always take independent financial advice before arranging a pension transfer.
Everyone’s situation is different, so you won’t necessarily benefit from a pension transfer just because other people you know are transferring their pensions to new schemes.
However, there are other situations where it does make financial sense to transfer your pension to a new or different scheme – here are a few possible examples:
- Your existing company scheme is being wound up.
- You have a personal pension that has high fees and you would like to transfer it to one of the new breed of low-fee stakeholder personal pensions.
- You have loads of small pensions, perhaps from a variety of employers, periods of self employment and various Additional Voluntary Contributions (top-up) plans and you would like to amalgamate them all.
- You would like to add your existing personal pension to an occupational pension scheme to benefit from lower fees/employer contributions. Only a minority of employers allow this.
- You can’t transfer any state pension benefit.
- If you left a public sector pension scheme before 1st January 1986, you can’t transfer
- If you are a member of a final salary pension scheme that provides a pension that rises in line with inflation, you can’t transfer
- If you are within one year of your pension scheme’s retirement age, you can’t transfer
The good news is that in all of the scenarios above, you would almost certainly end up with a big reduction in your pension entitlement if you transferred to a different pension – so the rules are protecting you.
Common Pension Questions
Can I transfer a pension into cash or an ISA?
I think I have some pensions I have lost track of over the years. Can I find these and transfer them into my current scheme?
My employer has just gone bankrupt. What will happen to my company pension?
My employer has offered me a cash lump sum to switch from the company's final salary pension scheme to a personal pension. Is this a good idea?
For bespoke pension transfer advice contact Credencis.
We will analyse all the facts and figures to see whether you will benefit from transferring between pension plans.
We can investigate your plans to establish vital information about the fund performance, the investment strategy, any asset allocation, and finally the charges. We will work with you to consolidate your pensions into one arrangement so you can benefit from reduced charges, and better investment performance. We will send you regular statements and review your investments on an ongoing basis to help you achieve the best possible growth for your funds.