Transfers: Not Just Seasonal News

Despite the Lionesses (rightly!) dominating the sporting headlines this summer, it has been impossible to ignore another footballing phenomenon throughout the summer. I am, of course, talking about Transfer Season.

Transfer season, whilst it can certainly seem to be never-ending, only occurs twice a year: over the summer period when English Football is taking a break, and midway through the season. And, this year it has not been without its drama. Harry Kane moving from his beloved Tottenham to Munich was just one of the dramatic revelations to occur.

That said, not all transfers need to be as dramatic. At times, if it’s right for you, a transfer can be seamless, stress-free and result in a stronger financial future for all. And they can take place all year round. I am, of course, referring to pension transfers – which is definitely not a tenuous link….

Pension Transfer Basics

It’s all well and good claiming that pension transfers can benefit people’s future finances, but how does it actually work?

In short, anyone can usually transfer their defined contribution pension from one provider to another at any time before they begin withdrawing money from it. In some cases, you may even be able to transfer your money once you’ve started taking money from your pension (once you’ve reached the age of 55, of course).

That said, some providers may have certain restrictions depending on when you want to transfer, so it is always best to double-check the terms and conditions before making a final decision.

Potential Benefits

Transferring your pension could provide a great deal of benefits to future finances. If you have accumulated a number of pension pots throughout your life (e.g. you might have several workplace pensions, in addition to your own personal pension), it can be a bit of a hassle to keep track of. So, transferring your various pots so that they are all in one place could make it easier to manage your retirement finances.

That said, convenience should not dictate your pension transfer decisions – convenience does not equate to stronger finances, after all. Other elements should be considered before making a financial decision. Transferring your pension could result in lower fees in the long term. Of course, this will depend on the provider you transfer to, however, it could result in savings approaching thousands of pounds in the long term.

Additionally, transferring your pension could expose you to a wider range of investment options. Your current provider (or providers) may not be offering you a large enough variety of funds or investment options, meaning that your money could be working that little bit harder for you. A pension transfer could offer you just that and, depending on which option best suits you, you could find yourself much better off when you reach your ideal retirement age.

No Need to Rush

Of course, transferring your pension (or pensions) should not be a quick decision – as is the case with any major financial decision.

It is important to understand the benefits you might be giving up by transferring to a different provider. For example, some providers might offer you an option to take more than 25% of your pension as tax-free cash. Others might offer clients guaranteed annuity rates. These are certainly worthwhile benefits, so it is vital to check before transferring.

A transfer could also result in high exit fees, again making it very important to check the small print before deciding to transfer. Additionally, if you have a pension pot worth under £10,000, it might be more beneficial to withdraw this amount tax-free, rather than transfer it to a new provider. All these considerations are incredibly important – and will require some legwork to get a complete picture of the benefits and drawbacks of transferring your pension. Luckily, My Pension Expert are here to help!

At My Pension Expert, our advisers will take stock of your current circumstances, as well as the lifestyle you want in retirement, and make recommendations tailored to you. They will also inform you of any fees you might incur, and the level of risk you might be undertaking before you transfer. Better yet, if they find any benefits offered by your current provider, that you might have missed, they will let you know. Our advisers will always ensure you are in the most informed decision, you can decide if a pension transfer really is the right thing for you to do.

Pension transfers needn’t be as dramatic as transfer season. It can be drama-free – particularly with the help of My Pension Expert’s qualified advisers. There could be clear benefits to transferring, which could result in you securing the retirement YOU want.

If you’re curious about the transfer options available, why not get in touch with a member of our team today, and we can help you decide which option is best for you.