Anthony Scott explains the process of transferring your pension.
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Can I transfer my pension to another provider and why would I need to do this?
Yes, you absolutely can transfer your pension to another provider. The why is a little bit more complicated. You’ve got to ask yourself about the product provider, how you’ve engaged with them when you last engaged with them.
People have moved out and just not changed their address with their pension provider, so that engagement could have been really poor. It doesn’t mean the product provider is poor, however, you might want to have a good look and see if that’s still right for you now.
How does a pension transfer work and how long does the process take?
It often depends on quite a few different factors, but we absolutely need to look at what a client has got, and where it is. The response we get back from the product provider can vary, we can get literally responses back in a day, and it can take three months.
It does depend on who we’re talking to, but the good news is, at Fiducia, I’ve got a brilliant team. They’re very used to chasing and encouraging product providers to give us the information that we need to be able to do some compare and contrast work.
Do I need a Financial Advisor to transfer my pension?
You do need a Financial Advisor to move your pension scheme around, because there’s a lot of digging that needs to be done to look at how your pension is doing and help you decide whether it’s right to move it, or not.
With Fiducia I’m delighted to say that we have worked with Openwork, one of the UK’s largest Financial Advisor Networks for years, and they guarantee advice. Which means when we tell you it makes sense, and you can have the assurance that it’s not just us saying that to you. It’s a complicated area.
Are pensions transferred automatically?
It’s highly likely that over the next however many years, people are going to change jobs, change employers, they may go Self-Employed, they may leave the country for a short period of time.
The point is, you’re going to build up lots of pension pots and they’re all doing different things with different product providers, and no, the pension doesn’t follow you from one job to another automatically. That’s why it’s great to have a good look and see where they’re at and if we should be doing some transfer work.
Can I transfer my pension to my bank account?
It depends on your age, and how much is in there, but in the main, no, you can’t. The point of a pension pot is you’re getting a lot of tax relief. Understanding why you’re saving to a pension and what your tax benefits are is enormously important. However, a pension is for your retirement, so when you get to a certain age you can start drawing on it. When you get to that age.
If you’re literally about to retire now, you can have up to 25% of your pension as a tax free cash lump sum, then the rest of it as you draw out. So the most important thing to consider if you’re asking that question, is taking some financial advice before you do anything with your pension pot and potentially make an expensive mistake.
How much will it cost to transfer my pension?
It varies, and pension pots can be highly complicated. They can also be very simple, and the great thing about Fiducia is that we offer our initial talk for free. So, if somebody wants to chat about how it might work in a lot more detail, that’s absolutely fine.
Once we take advice forward, we will be very clear about what our charging structure would be for that piece of work. We talk about it together, sign it off together and the client will be crystal clear about the fees.
Don’t be frightened about your pension pots, engage in them. It’s really likely that you have built different pension pots, the most important thing is to understand that something you did twenty years may not still suit you. Tax planning is essential with pensions, so engage with a Financial Advisor, have a conversation, get to know what you can and can’t do and then you’ll feel much happy about the job you’re working with.
The value of investments and any income can fall as well as rise and you may not get back the original amount invested.
Tax concessions are not guaranteed and may change in the future. Tax free means the investor pays no tax.