Transferring your UK pension

If you leave your pension scheme, the benefits you’ve built up still belong to you. You normally have the option to leave them where they are or to transfer them to another pension scheme.
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UK pension transfers
You can normally transfer pension benefits held in a scheme that you have left to a new pension scheme at any time up to, generally, one year before the date when you are expected to start taking retirement benefits. In some circumstances, you can also transfer after you have started to receive retirement benefits but this is not common.

The first step is to find out your cash equivalent transfer value (CETV), also known as the transfer value, by asking your scheme administrator or pension provider. They may ask you to do this in writing, and may have a form that you need to complete.

Your scheme administrator or pension provider will then provide you with a Statement of Entitlement. If you’re eligible for a CETV this must be provided within three months of you asking for a transfer value. It’s a written document that sets out your transfer value, together with details of the benefits you have built up under the scheme, and information that your new scheme will need if you decide to proceed with the transfer. There may also be additional forms included to start the transfer process.

If your Statement of Entitlement relates to benefits held in a defined benefit pension scheme, the transfer value is guaranteed for three months*. If you do not start the transfer process within the three month period, the actual amount transferred may be higher or lower than the amount shown in the Statement of Entitlement.

If you’re a member of a defined contribution pension scheme, the transfer value may change as the value of the investments held in your scheme changes.

If you decide to transfer to a new scheme, your scheme administrator or pension provider must pay the benefits across to the new scheme within six months from the start of the transfer process.

Overseas pension transfers

A good option if you if you are a UK expat is to transfer you UK pension to your current country of residence.

You have two options either through an International Self-Invested Personal Pension (SIPP) or a Qualifying Recognised Overseas Pension Scheme(QROPS)

International Self-Invested Personal Pension (SIPP)

A SIPP is a flexible type of personal pension.

It offers a wider choice of investments than a standard pension plan – you’re not restricted to a small range of funds operated by one insurance company or bank as you are with many personal pension plans.

An International SIPP is often the most suitable choice for someone living outside of the UK and the EU.

Qualifying Recognised Overseas Pension Scheme(QROPS)

QROPS allow British expats to transfer their UK pension overseas and they may be a better option for people with large pension funds.

They mirror regulated UK pension schemes so they leave you in a similar tax position as if you were still investing in the UK.

The Lifetime Allowance only applies at the time of transfer, therefore a QROPS may be a good alternative for UK pension funds approaching or already over the current UK Lifetime Allowance.