Sometimes changes at home or work can lead to retirement savers transferring their pensions between providers. If you are considering a switch, here are some of the most frequently asked questions about pension transfers explained.
Do I have to leave my pension when I leave a job?
No. You can take your pension with you by transferring the money to your new employer’s scheme.
How do I know how much to transfer?
Your pension administrator will give you a form detailing the pension transfer value. The transfer value is how much the fund is worth on a given day and stays in force for a few weeks before a new value needs calculating. Sometimes this is called a cash equivalent transfer value (CETV) if you are leaving a final salary or defined benefits pension.
Will I lose benefits if I transfer?
This depends on the rules of the scheme you have left behind. Some continue with full benefits after you have left, others stop the extra benefits. Your transfer value should explain what happens to any benefits once you leave your employer and if they are time limited.
Can I transfer out of a public sector or civil service scheme?
No. This is no longer allowed.
Can I take some cash from my pension?
Only if you are aged 55 or older unless some special circumstances apply, such as enforced early retirement due to illness or disability.
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Where can I move the money?
You can only move the money to another registered pension scheme, such as a workplace pension, a personal pension, a SIPP, a SASS or a Qualifying Recognised Overseas Pension Scheme (QROPS).
Do I need professional advice?
If your pension fund is worth more than £30,000, you must take professional advice from an IFA or the Pension Wise website before taking any action. They will go through your options and discuss if your plans are value for money.
Extra years and cash bonus offers
Sometimes a new employer will offer extra years of scheme membership in return for the transfer value. This adds to the fund. Some FTSE350 pensions will offer cash incentives for retirement savers to leave the scheme. Your professional adviser will tell you if this is an offer you should accept.