Pension transfers into SIPPs

Transferring Your Pension into a SIPP

Having worked for several employers, you may have many different pensions. Bringing them together may reduce fees and give access to better investment performance. SIPPs can, therefore, be an attractive option if you have several existing pensions tied up in other schemes.

Transferring all your pensions to a SIPP may mean all your money is in one place but this may not be suitable for you as you may lose valuable benefits attached to the schemes you left. It is very important that you are made aware of any possible disadvantages when you transfer a pension as well as any advantages so you can make a fully informed decision.

Final salary options for SIPPs

These (defined benefit) schemes normally offer an unbeatable deal.

They provide a guaranteed pension as well as generous benefits for spouses that are hard to replicate in private schemes, so are unlikely to be suitable for transferring into a SIPP.

Defined contributions into SIPPs

Employers Non-Final Salary Schemes Into SIPPs
These (defined contribution) schemes do not provide any guarantee for the amount of pension that you will receive.

The amount they pay is relative to how the investment performs, how much you have put in and deduction of charges. If you are a current member of an employer’s DC scheme, it may not be worth moving as you would lose the employer’s contribution. Although some employers may agree to pay into your SIPP instead.

Personal pension switch to SIPPs

These personal (defined contribution) schemes also do not provide any guarantee for the amount of pension that you will receive. If you move your personal pension into a SIPP, it is important to understand why you are doing this and what the potential benefits are. Otherwise you may be moving your money into a scheme that offers little or no additional value over your personal pension but can have higher charges and expose you to higher investment risks.