One of the most common questions that we get asked as advisers is, Can I transfer my old Pension into my current Workplace one?
We find the initial motivation behind wanting to transfer pensions into one arrangement is usually to keep their affairs in good order with everything under ‘one roof’. However, for some people, this very reason is their main reason not to transfer their pension as they do not like to have all their eggs in one basket. This initial choice to potentially transfer a pension or not is purely based on personal preference.
The initial response that we tend to provide to the question of transfers is yes, theoretically you can transfer however you need to understand whether it is in your best interest or not to do so.
We would initially ask what type of pension you are considering to transfer, primarily because if you have an occupational style Pension of a Final Salary Pension, the general rule of thumb is that a transfer is unlikely to be in your best interest.
When reviewing pensions, it’s not uncommon for older style arrangements to have penalties levied as well as a raft of features and benefits lost upon transfer, these are often referred to as ‘safe guarded benefits’ and could be a Guaranteed Annuity Rate, a Guaranteed Minimum Pension or entitlement to more than 25% of the fund as tax-free cash.
The charging structure on your old pension will help clarify if any penalties would be charged on transfer and also helps you see if your old pension is more expensive (higher level of charges such as the Annual Management Charge) to run than your current workplace pension.
If you are reading this blog and are wanting to know whether a transfer of pensions is an option for you to consider, please feel free to email us at firstname.lastname@example.org or call us in 01883 332260 and one of the team will be able to help. When we have this initial contact with you, we will set out your options which could include general guidance, full transfer advice or directing you to your pension provider, depending on how you would like to proceed.