The contributions you have been paying into your occupational or private pension scheme are yours – if you leave the scheme, the benefits that have been built up are still yours.
When you leave any pension scheme, you have essentially two options:
• Leave the funds just where they are, for you to drawdown when the benefits become payable.
• Transfer the benefits to an alternative pension scheme.
Reasons for transferring
There are a number of reasons why you may want to move all or some of your accrued pension benefits to a new scheme:
• You may be changing jobs – and, therefore, no longer contributing to your former employer’s pension scheme.
• You may want to transfer to an alternative pension scheme that offers more attractive benefits.
• You may want to bring together, under a single umbrella, your personal pensions and pensions from one or more previous employer.
Most pension schemes allow you to transfer the benefits to a new scheme, at any time up to one year before the pension becomes payable – if yours does not, the funds need to stay where they are until your pension becomes payable.
If you want to go ahead and transfer, it is important to remember that some benefits provided by your current scheme – such as life or guaranteed income - may be lost.
If you are able to transfer, your pension pot may be moved to:
• Your new employer’s workplace pension scheme.
• A personal pension scheme.
• A self-invested personal pension (SIPP).
• A stakeholder pension (SHP) scheme.
Considering your options
Because of the important financial and longer-term implications of any Pension Transfer, it is important to take Independent Financial Advice before making any such move, as a transfer may not be in your best interest. For example, there may be exit penalties or you may lose valuable bonuses and benefits.
Independent financial advice, specialising in pensions is our strength here at Independent Pension Specialists Ltd (IPSL). Due to the stance taken by the Financial Conduct Authority, we have taken the decision not to provide financial advice specifically on Defined Benefit pension transfers for the foreseeable future.
The questions we ask
Recognising how much pensions and pension legislation have changed in recent years, we ask you a series of questions as part of our in-depth pension review service:
• When was the last time your pension arrangements were reviewed?
• Do you know whether the benefits will be sufficient for your retirement?
• Are you paying more charges than necessary?
• Are the underlying investments right for you?
If the answer is “yes” to one or more of those questions, you might want us to go into further detail with a further range of questions, such as:
• Do you have a personal pension that started before 2006?
• Do you have a pension with a company that is closed to new business?
• Do you have pension benefits left in a scheme with a former employer?
• Have you been offered an incentive to leave a company pension scheme?
• How do you plan to maximise the benefits of your pension provision – to realise the maximum income possible in retirement, by self-investing or the purchase of a commercial property?
• Do you want to look at how best to structure your retirement income?
• Do you need to access your pension now?
If you would like to discuss your options in more detail and draw on the specialist, expert advice we provide here at Independent Pension Specialists Ltd, simply call us on 01622 238000 or complete the “Contact Us” form.