How to move pension savings to a different provider

14 May 2024

Written by Retirement Line

There can be good reasons to move your pension pot across to a different provider. But is it a good move for you? And how do you move your pension pot if you decide to go ahead?

Millions of people will rely on income from their pension savings in retirement, usually in addition to the State Pension. For many of us, much of that income will come from savings in one or more ‘defined contribution’ pension schemes - also known as money purchase schemes.

Although you typically can’t access your pension pot until age 55 at the earliest (57 from 2028), your money is not necessarily locked up in your pension scheme. You can often move a pension pot to another scheme, even if you can’t take an income from it yet. 

Whether it’s because your circumstances have changed, you want to consolidate your pensions, or you can get more from your money, moving your pension might be worth considering. But there are times when you would gain more from leaving your money where it is.

We look at the pros and cons of moving your pension pot to another scheme, and how to go about doing it – including how to move a pension from an old job to your current employer’s scheme.

Important: 

• This article relates to UK defined contribution pension schemes; there are different rules for defined benefit schemes – our guide to pension consolidation includes information on this. 

• There are special rules for moving pension savings to an overseas pension scheme – please see more information at gov.uk. 

• Be wary of anyone offering to help move your pension savings on your behalf or cash your schemes in early – read more about pension scams. 

Why might you move your pension to another provider?

Before we delve into the specifics of how to move your pension to a new provider, it's important to understand why you might consider it. Here are three reasons people might typically move pension savings: 

1. Make things simpler

Over the course of your career, you may have joined multiple workplace pension schemes as you leave old jobs and start new ones. Managing them separately can be complicated and time-consuming.

If you move pensions into one scheme it can simplify your retirement planning and make it easier to keep track of your pension savings. You can read more in our comprehensive guide to pension consolidation.

But not all defined contribution pensions are workplace schemes. You may also have money in pensions you’ve set up yourself, such as a stakeholder pension or self-invested personal pension (SIPP). Here too, you may wish to combine a number of pensions into one scheme for simplicity.

Even if you just have one defined contribution pension, you may simply wish to move to another provider for one of the reasons below.

2. Cost savings

Different pension scheme providers have different fee structures. When you move pension savings to a new provider, you may be able to reduce the fees and charges you pay. That could potentially increase the overall value of your pension fund over time.

3. Better investment choice or performance

If you are unhappy with the investment performance of your pension savings, you may wish to move to another scheme with a better track record. Some schemes also offer more choice when it comes to investment funds, and that may be important to you. For example, a SIPP typically offers more investment choice than other pension schemes.

4. Better features or service

Some providers may offer more flexibility or a more user-friendly online experience than your current provider. As an example, some schemes make it easier to make ad hoc contributions to your pension pot than others. Likewise, some schemes have a better reputation for customer service than others.

Why might I move my pension to a SIPP?

If you're especially interested in getting more choice in the way your pension savings are invested, you may decide to move your pension to a SIPP (self-invested personal pension).

With a traditional personal or workplace defined contribution pension, you may have limited options for how your pension savings are invested. You will typically find that your scheme has invested your pension savings in one or more managed funds. 

You may be able to choose a lower, medium or higher risk fund. But if you want more choice and flexibility, one option is to move your pension to a SIPP. 

A SIPP gives you a broader range of investment options. For example, you may be able to choose between investing in stocks, bonds, mutual funds, commercial property and so on. There are of course risks with a SIPP: as with all investments, the value of your investments can go down as well as up. 

The government-backed Money Helper site has a useful guide to pension investment options. It’s a good source of information if you want to find out more about how you can invest your pension savings.

How to move a pension to a new provider

Now, let's dive into the process of how to move your pension to a new provider. The process will differ depending on the types of pensions involved.

1. Gather your pension scheme information

Make a note of core information about the pension scheme that you are thinking about moving away from. Do this for each scheme you are considering leaving.

You’ll need the provider's name and any reference numbers or account numbers unique to you. You may get this from pension statements the scheme sends you, or from online accounts.

See if you can also find information about the scheme’s fees, charges, investment performance and investment flexibility. You can then compare this with new schemes you are considering.  

This is also a time to think about whether you may have lost contact with one of your pension schemes. See our guide to tracing lost pensions for information on how to check for lost or forgotten pension funds.

2. Contact your current pension provider

This isn’t strictly necessary, as sometimes your new scheme will handle all contact with your existing scheme on your behalf. However, there are some very good reasons for contacting your existing pension scheme.

They will confirm whether the scheme allows you to move your pension savings to another provider. In some cases, a scheme won’t allow this. In others, it will only let you move some of your pension pot to another provider. But the good news is that defined contribution schemes will typically let you move your pension pot.

Your scheme provider will also let you know of any implications of moving your savings. These could include:

• Charges for moving your pension savings away from the scheme (‘exit charges’).

• Loss of the ability to access your money earlier than your new scheme may allow.

• Loss of the right to take more than the standard 25% tax-free cash lump sum from your pension pot. 

• Loss of life assurance as a scheme member.

• Loss of ‘safeguarded benefits’ benefits, such as a guaranteed income or guaranteed annuity amount (GAR) that could provide you with more income in retirement than might be possible when moving away from the scheme. If the value of safeguarded benefits is more than £30,000, you may have to get regulated financial advice before moving your pension savings to another scheme. 

If a move is possible, ask your scheme how much is in your pension pot, known as the transfer value, as your new scheme will likely ask for this. 

If you decide to go ahead with a move of your pension funds, your existing provider will be able to confirm whether you need to fill in any of their forms, or whether it can be done through your new scheme.

3. Choose your new pension scheme

Unless you are looking to move money to a pension scheme of which you are already a member, you will need to research different providers to find a scheme that best suits your needs. Factors to take into account will include any set-up charges, ongoing fees and investment options. Consider also how easy it is to monitor your pension and carry out tasks such as making additional contributions. 

If you do choose a new provider, you'll need to open an account with them, and this can typically be done online. They will typically have some process in place where you can check whether they will accept the move of your pension savings from your existing provider.

4. Make the request to move your pension savings

You will either fill out a transfer request form from your existing scheme or make the request to the scheme receiving the funds. Either way, you will need details of the existing scheme (see step 1 above). Ensure that all details are accurate, as mistakes can cause delays in the process.

5. Monitor progress

Pension schemes tend to say that the move of pension pots can take up to 12 weeks. It may happen sooner, while in some cases things can get delayed. Your current and new providers should keep you updated and let you know about any issues or delays.

Your current provider will carry out checks on the legitimacy of the new scheme and will decide whether to accept or refuse the request. If they refuse, they will let you know their reasons, which are likely to be concerns about the new provider. If they accept the request, they arrange to move your pension savings as requested.

6. Look again at your pension contributions

Once the transfer is complete, you should find it easier to manage your pension savings. This is a good time to look again at how much you are contributing to your pension each month. 

You should also be able to get a forecast of how much income you might expect from your pension savings if you continue contributing at the same rate. Think about whether you can contribute more: even a small increase could greatly improve your retirement income. See our article ‘How to increase your pension pot’ for more information.

This is also an opportunity to look at how your pension savings are invested. If you have moved your savings to a SIPP for example, you will be able to choose from a range of investments. 

How to move your pension savings – a checklist

While there are many potential benefits of moving your existing pension savings to another scheme, there are also some reasons it may be against your interests to do so. With so much to consider, here is a checklist summarising the main points covered in this article.

Useful sources of help and information

Moving your pension to a new provider is an important decision and can have long-term implications on your retirement income. Make sure you thoroughly research different providers, carefully checking on their different fees, features and investment options.

Pension scheme providers. Don’t shy away from asking both your existing and new pension schemes as many questions as you like. Although they likely won’t be able to give you advice, they should have the experience and expertise to clarify issues you might be confused about.

Contact MoneyHelper. You can get free, impartial information about moving your pension savings from MoneyHelper, the government-backed hub for money and pensions guidance. Their service includes free one-to-one help by phone from an impartial pension expert.

Independent financial advisers. An independent financial advisor (IFA) can provide tailored advice based on your individual circumstances. Advice can be expensive, however, so you may wish to weigh up the cost of advice with the complexity of the decision you face and the size of the pension savings you want to move.

Moving pension funds close to retirement

If you are especially close to retirement and considering moving a pension pot between schemes, please see our guide to pension consolidation for some important points to consider. 

Retirement Line’s annuity guidance team will of course be happy to discuss your own situation and provide information and guidance to allow you to make an informed decision on moving pension savings before buying an annuity. This service without obligation – only if you later choose to buy an annuity with our help will we be paid a commission by the annuity provider. 

Our comprehensive annuity service also includes:

• Giving you comprehensive information to help you choose the right annuity.

• Helping you shop around by comparing the best annuity rates from leading providers. 

• Checking your availability for an enhanced annuity. This is a type of lifetime annuity that pays more income if you have a medical condition or make certain lifestyle choices, such as smoking or drinking. 

• If you decide to buy an annuity, liaising with your pension scheme/s and chosen annuity provider until your annuity is in place.

Just call us on 0800 652 1316, request a call back or email us at info@retirementline.co.uk. and we will be delighted to help.

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