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Can I transfer my pension?

Tim Heming
Written by  Tim Heming
Jonathan Leggett
Reviewed by  Jonathan Leggett
5 min read
Updated: 15 Mar 2024

Think you might want to transfer a pension to a new provider? Before you do anything, read our guide to learn how to do and what fees you might apply.

Saving enough to live comfortably in our later years should be a priority for most of us; this is where a pension can help.

Pensions provide a way of saving and investing during our working life to build a pot we can draw on in retirement.

However, not all pensions are equal and there can be several reasons for wanting to transfer your pension to a new provider.

This guide explains whether that is possible, what you should consider and the steps you’ll need to take.

What is a pension transfer?

A pension transfer (also referred to as pension switching) involves moving the funds from one pension scheme to another.

This process allows people to switch to a scheme that’s better suited to them, has lower fees, has access to different investment options or to consolidate multiple pensions.

Transfers can occur between different types of pensions, such as from a defined contribution pension to a self-invested personal pension (SIPP), or from one SIPP provider to another.

It's important to carefully consider the implications because transfers may come with fees, potential loss of benefits, or changes in investment performance.

Seeking advice from a financial adviser or pension specialist is often recommended to ensure that the transfer aligns with your retirement goals.

couple sorting finances

Why might you consider moving your pension?

There are a number of reasons you might consider transferring your pension. These include:

  • Better investment options. Allowing access to a wider range of investment choices, potentially offering higher returns or lower fees

  • Consolidation. Bringing multiple pensions together will make it easier to manage and potentially reduce the fees you pay. If you have moved jobs frequently and you’re unsure how many workplace pensions you have, our guide to finding an old pension may help

  • Improved benefits. Some schemes offer better benefits, such as the choice of investment funds from the whole market, an online account to manage your pension or more flexible withdrawal options when you start drawdown

  • Lower fees. Moving to a pension with lower management fees could help your pension over time, as higher fees can eat away at your pension pot

  • Improved service. Switching to a provider with better customer service or online tools may make it easier to manage your pension

  • Life events. Unforeseen events such as divorce, redundancy, or relocation may mean you have different needs

If you’re worried you might not have the funds to support you financially in retirement, our guide to how much you should pay into a pension can help.

What do I need to consider before transferring a pension?

There are a few considerations before transferring your pension. These include:

  • Fees and charges. Evaluate any fees associated with the transfer, including exit fees from your current provider and set-up fees with the new one

  • Benefit loss. Find out whether transferring your pension will result in the loss of valuable benefits, such as guaranteed annuity rates (which can guarantee a higher minimum income in retirement) or employer contributions (which help grow your overall pension pot). Profile Pensions offers a Find, check & transfer service which will check for any benefits or penalties, and then complete the transfer. (One-off 1% arrangement fee applies)

  • Investment performance. Consider how the new investment options compare to your current pension and check whether they match your risk tolerance and retirement goals.

  • Pension type. Check if your current pension has any special features or protections that may not be available in the new scheme.

  • Professional advice. Seek guidance from a financial adviser or pension specialist, like our partner Profile Pensions, to make sure the transfer is suitable for your circumstances and long-term financial plans

  • Legal implications. Understand any legal or tax implications of transferring, particularly regarding pension protection and inheritance planning

What are the benefits of transferring my pension?

There can be several benefits to transferring your pension, including potentially improved investment performance, lower fees and easier management by consolidating your pension into one place.

In general, the overarching reason is that it can help put you in a better financial position for your retirement.

Am I eligible for a pension transfer?

Most workplace and personal pensions are eligible for transfer. You can usually transfer your pension at any time before you start taking money from it and sometimes you’ll still be eligible for transfer after you’ve started to take money from it.

It’s smart to check with your provider before you take any money from the pension and you usually can’t transfer a workplace pension you and your employer are still paying into.

Some schemes will require advice from a financial adviser for transfers over a certain amount.

Special considerations apply to Defined Benefit Pensions because of the valuable benefits they bring.

You should also ensure you're not restricted by bankruptcy or a pension-sharing order from a divorce.

How do I initiate a pension transfer and what documents will I need?

To start a pension transfer take the following steps.

  • Contact the new provider. They should help guide you through their requirements - Profile Pensions make signing up and creating a new personalised pension plan, simple, quick and easy online.

  • Gather your documents. You may need your current pension details, identification documents such as your NI number, a passport or recent utility bill, and a transfer form from the new provider. But a service like Profile Pensions will handle the transfer for you, and can help you find missing details.

  • Seek authorisation. Your current pension provider may require you to supply them with a signed transfer authority form. Again, our partners Profile Pensions handle all of this for you - making things easier for you.

  • Take financial advice. For certain transfers, especially defined benefit pensions or large sums, you may need advice from a financial adviser. Profile Pensions Find, check & transfer service checks for benefits and penalties, giving you peace of mind.

  • Await confirmation. Once initiated, both providers will coordinate the transfer, and you'll receive confirmation when it's complete. By using a service like Profile Pensions, they’ll do all the work for you and keep you updated about your pension transfer.

Are there any fees associated with transferring a pension?

There are several fees associated with transferring a pension. Also, the existing fees you pay may change under a new provider. Fees typically include:

  • Exit fees. Charged by your current provider for leaving the pension scheme

  • Set-up fees. Incurred with the new provider to establish the transferred pension

  • Advisory fees. If seeking financial advice for the transfer, advisers may charge a fee

  • Annual management charges. Ongoing fees for managing the pension fund with the new provider

  • Transaction costs. Associated with buying and selling investments during the transfer process, adding to overall costs

How long does a pension transfer typically take to complete?

Pension transfers in the UK typically take around four to 12 weeks to complete, depending on factors such as the complexity of the transfer, the responsiveness of the providers involved, and any additional requirements such as financial advice or documentation.

That’s why using a service like Profile Pensions can make this process easy, quick and stress-free for you, as they do all the hard work for you.

All while knowing that your pension is also in the best place for you, with a personalised pension plan made up of funds chosen from the whole of the market.

Other useful guides

Find a private pension with our partner Profile Pensions

Setting up a private pension can be quick and simple online, but it's a good idea to take some time to do your research first. Getting expert and impartial advice is a good idea if you're not a confident or experienced investor, although this will come with an added cost.

We have teamed up with our chosen partner Profile Pensions to help you choose the right private pension plan. They can help you combine your old pensions into one, easy-to-manage plan and they will choose the best investment plan for you, using funds from the whole of the market.

You will also get a dedicated Pension Adviser to answer any questions. If you need help tracing a lost pension or want them to check for any penalties or benefits, they can also do that for you, for a one-off fee of 1% of your pension value (taken at transfer from your pension pot).

Capital at risk. Past performance is not a guide to future performance. This website does not constitute personal advice. If you are in doubt as to the suitability of an investment please speak to a financial adviser. Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change. Ltd is an Introducer Appointed Representative of Profile Pensions, a trading name of Profile Financial Solutions Limited which is authorised and regulated by the Financial Conduct Authority. FCA number 596398. Registered in England & Wales, Company Number 07731925. Registered office address: Norwest Court, Guildhall Street, Preston, PR1 3NU.

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