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A Short Guide to the Pension Transfer Process

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UK Pension Transfers

UK pensions can broadly be separated into two categories: Defined benefit (Final Salary) and
Defined Contribution (money purchase, personal pension, stakeholder etc).

The UK pension landscape is one that is constantly changing and evolving, but a pension
isn’t something you can leave to look after itself.

That’s why we recommend everyone should review their pension from time to time with our simple pension health check.

Should I transfer my final salary pension?
Here’s our simple three step process:

  • Help you understand what your annual pension income
    in retirement could be.
  • Help you decide if you should make changes now,
    so that you will receive the income you need in retirement.
  • Explain the advantages and disadvantages of final salary pensions.
  • Explain the difference between SIPPs and QROPS.
    (And why our views on this differ to most other advisers.)
  • Answer any questions you may have about your pension.
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UK Pension Consultation
  • With your authorisation, our pension tracing team
    can contact your scheme administrators.
  • Our advisers can then analyse and breakdown the
    information and produce a complimentary,
    comprehensive financial planning report.
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Complimentary Pension Health Check  
  • Our adviser will run through the complimentary report
    with you and provide you with a full retirement planning
    recommendation.
  • Following the recommendation, the ball is in your court!
    If you chose to follow our recommendations, we will be
    with you every step of the way for your pension transfer.
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Advisor Recommendation 

Why Transfer your pension to a SIPP?

Very attractive transfer values

Traditionally, transfer values have been calculated
as a multiple of around 20 times the annual
retirement income.

A final salary pension worth £10,000 a year would
produce a lump sum of £200,000. Recently we are
seeing transfer values of 30-40 times the annual
income which, in this example, would provide a
lump sum potentially up to £400,000 – a
substantial increase.

100% of pension passed to your
loved ones at death

100% of your SIPP can be passed down to future
generations or any beneficiaries of your choice.
Defined benefit pension schemes are restricted,
normally allowing only 50% of the pension to be
passed on to a Spouse and often children are not
entitled to any pension. A SIPP gives you the
freedom to decide who can receive your pension
with no restrictions.

Flexible Access Drawdown (As early as 55)

New rules introduced in April 2015 mean you can
withdraw as little or as much as you like from the
age of 55. A SIPP gives you complete flexibility as
to how you use your accumulated pension savings
meaning you can manage your retirement income
how you like through flexible drawdown.
These choices are not available to defined benefit
scheme members.

Flexible investment strategy

Your SIPP is under your control, you have the
freedom to choose your investment strategy
whether that be one individual fund or multiple
funds. A suitable investment strategy that
considers your appetite for risk should be able
to meet and surpass the returns needed to justify
the transfer.

Consolidation options

If you have accumulated several pensions from
your time working in the UK, consolidating them
into a SIPP will allow for simpler administration
and a more manageable investment strategy

Inheritance tax

Any money left in your SIPP when you die can
normally be passed to your heirs free of
inheritance tax. Any withdrawals they then make
will usually be tax free if you died before you
were 75. If you die when 75 or older, any
withdrawals will be taxed as their income.

PCLS

You are entitled to take a 25% tax free lump sum
when you start accessing your pension. Depending
on where you are resident, your income may also
be subject to tax in your country of residence as
well so it’s important to understand the local
tax rules.

Download Pension Transfer Brochure here

QROPS – Qualifying Recognised Overseas Pension Scheme

QROPS stands for Qualifying Recognised Overseas Pension Scheme (QROPS) and is a
retirement plan based outside of the UK that is recognised by HMRC.

QROPS allow those living overseas permanently to transfer their UK pensions to a pension based in their
new country of residence, in theory simplifying their affairs and enable efficient retirement planning.

QROPS are a complicated solution and do not suit every expats needs.

A QROPS has certain rules that must be met:

• Established outside of the UK
• Recognised for tax purposes in the country where it’s located
• Regulated in the country where it’s established.