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Our Best SIPP puts you in control of your pension by giving you the freedom to choose your own pension investments and the flexibility to manage them.

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What to consider before transferring a pension

You have chosen to undertake this pension transfer on an Execution Only basis. This means;

  • You have not asked for or received advice;
  • It is your decision alone to proceed with the transfer; and
  • Bestinvest is not taking any responsibility for whether the transaction is suitable for you

Before you consider transferring your pension you should be aware of the implications this may have. We have therefore produced the following notes to help you decide if this is the right decision for you. Bestinvest reserves the right to refuse to accept (or at least to consult with you further) pension transfer instructions where it is advised of information that might indicate the transfer may not be in your interests (for instance, if we are made aware that the existing pension contains benefits that might be lost on transfer) although, as noted above, as this is an execution only transaction the responsibility for the suitability of the transaction is yours alone.

You may ring us for guidance on pension issues generally if you are unsure of any technical matter either in this note or elsewhere. But if you consider you would benefit from specialist pension transfer advice, specific to your circumstances, this is available from our Financial Planning team. Such work is, however, normally carried out on an agreed fee basis.

A. Costs

Is the new plan more expensive than your current plan? Does your current plan provider impose any exit penalties or charges if you transfer or cease contributions?

The benefits of your new pension arrangements and service should outweigh any increase in cost to you or be worth the fees / penaltiesincurred. You should ensure that the transfer is not going to disadvantage you financially.

B. Guaranteed Annuity rates

Does your existing pension plan provide an entitlement to a Guaranteed Annuity Rate or a Guaranteed Investment Return?

Although rare, some pensions have inbuilt guarantees of investment growth or annuity rates; these could be lost on transfer.

C. With-Profits

Has your current pension exposure to a With Profits fund?

You may have attractive bonus rates that could be lost on transfer. Moreover, the transfer value of With Profits funds may be subject to something called Market Value Reduction, which will reduce the size of your pension fund available to transfer.

D. Other benefits

Does your existing pension scheme provide life assurance, waiver of premium (a form of premium insurance) or the option of an early retirement age?

These may be lost on transfer. Any subsequent deterioration in your health, since these additional benefits were provided, may mean that replacement cover will be more expensive or difficult to obtain.

E. Final Salary Pension Schemes, Section 32 policy and other occupational pension schemes

Do you have a Final Salary Pension Scheme or a Section 32 policy?

It is generally not advisable to transfer benefits built up in a Final Salary Pension Scheme or Section 32 policy and we will not accept these pension transfers on an Execution Only basis. Other Occupational pension schemes (including Executive Pension Plans) should be similarly checked carefully to ensure that valuable benefits are not being lost. In particular, you should check the amount of tax-free cash your current pension allows you to take, which may exceed the 25% limit allowed under normal pension rules.

F. Approaching retirement

Will the length of time your fund is invested offset any cost or lost benefits? If you are close to retirement it may not be worth considering a transfer; ask yourself whether the new service will provide the options you require in retirement.

G. Transfer timings

During the pension transfer period you may be exposed to fluctuations in the value of your pension due to market volatility.

Pension transfers can sometimes take a while to complete. There may be significant changes in market prices during this period which may affect your pension value, in particular you will not benefit from any rise in markets whilst your pension fund is not invested.

This list covers some of the main considerations but is not exhaustive. Your decision will depend on your personal circumstances and objectives, and the characteristics of your current pension plan. Your current plan provider/administrator will be able to provide information about your current pension plan. Information about pension transfers at www.moneyadviceservice.org.uk

Important Information

SIPPs are not suitable for everyone. If you don’t want to invest across different asset classes or don’t think you will make use of the investment choices that SIPPs give you then a SIPP might not be right for you. Self-directed investors should regularly review their SIPP portfolio, or seek professional advice, to ensure that the underlying investments remain in line with their pension objectives. Prevailing tax rates and the availability of tax reliefs are dependent on your individual circumstances and are subject to change. Please note the term Best is a brand name of the Bestinvest SIPP.

OUR AWARDS

Past performance is not a reliable indicator of future returns

The value of your investment can go down as well as up, and you can get back less than you originally invested.

The Bestinvest Online Investment Service, including any account analysis and investment reports provided by our guidance services, is an online execution-only dealing service for investors who want to make their own investment decisions. It does not provide advice on the suitability of products and investments; if you are unsure about the suitability of any investment you should seek professional advice. Clients of our Investment Advisory Service and Managed Portfolio Service can use the website to obtain current valuations of their investments but cannot trade on these accounts online and should call their adviser if they wish to discuss changes to their investments.

Past performance or any yields quoted should not be considered reliable indicators of future returns. Restricted advice can be provided as part of other services offered by Bestinvest, upon request and on a fee basis. Before investing in funds please check the specific risk factors on the key features document or refer to our risk warning notice as some funds can be high risk or complex; they may also have risks relating to the geographical area, industry sector and/or underlying assets in which they invest. Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change.

Issued by Bestinvest (Brokers) Limited (Reg. No. 2830297), which is authorised and regulated by the Financial Conduct Authority. Financial services are provided by Bestinvest (Brokers) Limited and other companies in the Tilney Bestinvest Group, further details of which are available here. This site is for UK investors only.
© Tilney Bestinvest Group Ltd 2016.

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