Transferring your pension; is it right for you?

Many people consider transferring their pension funds, from consolidating their old workplace pensions to moving out of a final salary scheme into a personal pension. If you have considered transferring your pension pot to another scheme or provider, here are six reasons why it could be beneficial.

1. Looking for better performance

Some people opt to move their pension because they are in an under performing scheme delivering poor – or non-existent – growth. If your private pension is performing poorly, you may well want to move your pension funds elsewhere.

2. Seeking out lower pension charges

Others want to transfer their pension because their scheme comes with punitive charges which eat into their returns, leaving them with less money in retirement. Shopping around for a private pension with lower fees could save you money.

3. Wanting to access a wider range of funds

Moving your defined contribution pension or final salary pension may sound like a good option if you want to access your funds or look at a wider range of funds than those offered by your current scheme.

4. Searching for better death benefits

If you feel the death benefits on offer with your current scheme do not match up those offered by more modern schemes, you may want to transfer your pension to a different scheme.
You might, for example, want to move your money into a scheme that allows one of your relatives to inherit part or all your pension when you die, rather than simply spouses or dependents. The same might apply if you are not married to your long-term partner but want them to inherit your pension once you’re gone.

5. Moving to a new employer

When you leave one job to move to another one, you are treated as having left the workplace pension scheme, but you do not lose the benefits you have accrued. At this stage, you may decide that you want to transfer your pot to the scheme offered by your new workplace or into a personal pension that you can access more easily.

6. Wanting to consolidate several pensions

As people change jobs more frequently during their working life, they often accumulate a range of old workplace pensions along the way. It can be hard keeping tracking of these, and difficult to really know how much your total retirement is worth. In some cases people have lost money as they do not have any details of their old lost pension.

For this reason, many savers want to clean up their finances by consolidating their pensions into one pot.

Things to consider when transferring a pension scheme

But while transferring your pension may sound appealing, you must go in with your eyes wide open and seek expert advice from a fully authorised and regulated by the Financial Conduct Authority financial adviser. It is important to do this for financial reasons.

It’s crucial that you don’t transfer out of a first-rate scheme simply because you want to cut all links with an old employer or simply you want to access the cash held within your defined benefit scheme. Make sure you research carefully and weigh up all the options before making the pension transfer.

If you are approaching retirement age, you need to think particularly carefully before deciding. Speak to Pension Works today on 0808 164 2664 or start a free Pension HealthCheck online here to see if transferring your pension is right for you.