Published On: Tue, Sep 3rd, 2019

How to transfer your pension pot – Pensions Minister Guy Opperman gives top tips | Personal Finance | Finance

When it comes to retirement, many will support themselves with savings and a private pension. One they’ve reached state pension age, they may also get the state pension. It may seem like a good idea for some pension-holders to transfer their pension to a different company. Recently, Minister for Pensions and Financial Inclusion, Guy Opperman, exclusively told “We’re making progress on transfers, with three major providers pledging to reduce to three weeks the time it takes to move a DC pension.

“I want the rest of the industry to sign up too, empowering savers to take control of their investments.

“If you’re considering your options, here are my top tips for making the most of your money.”

It comes as major providers Aon, Mercer and Willis Towers Watson pledged to cut times to 21 days in most cases, following crunch talks.

Guy Opperman’s transfer tips:

1. If you’ve had several jobs, you’re likely to have a few old pensions.

The Pension Tracing Service can help you find them. Once you’ve identified these pots, you will need to decide what to do with them.

2. Once you have found your old pensions check their costs and charges.

Check whether you are getting value for money and if your provider has any exit fees or value guarantees.

Find out what the tax implications might be if you transfer.

3. Contact your pension provider to inform them you want to move your pension pot.

When you contact your pension provider to tell them you want to move your pension pot, they must action your request within six months.

The reality is that those firms who use electronic processes, and platforms such as Origo, can make a transfer much more quickly, typically within two weeks.

Check with your provider what their average transfer time is, and remind them that they have a legal duty to carry out transfers promptly.

4. Check your pension company’s transfer processes.

If you are signed up to a firm who has not modernised their systems, you could find yourself involved in a lengthy process of letters and red tape.

When you are looking for a new pension provider, look for those firms who have signed up to The Transfers and Re-Registrations Industry Group (TRIG) framework. They will handle your pension transfer faster.

Recently, pensions commentator and former Minister of State for Pensions, Sir Steve Webb, warned of “unexpected disadvantages” to watch out for when consolidating pension pots.

It came as Royal London identified five reasons why it could be worth thinking twice about consolidating a pension pot.

Mr Webb, who is the Director of Policy at Royal London said: “One of the questions I am asked more often than any other is whether people should combine all of their pensions in one place.

“Whilst that may seem the tidiest thing to do and can have some advantages, there are also a number of unexpected disadvantages to merging pension pots.

“Older pension policies may have attractive features which would be lost if transferred, whilst small pots benefit from certain tax privileges which do not apply to larger pots.

“As ever, the best approach is to seek impartial advice or guidance before consolidating pension pots.”

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