Transferring a private pension to a SIPP is generally a very straightforward process. In this guide, we will explain how you can transfer a private pension into a SIPP so that you can have more control over the costs and the investments you hold or your retirement.
How to transfer a private pension to a SIPP
The first step is to speak to the SIPP provider you want to transfer your pension to and provide them with details of your old pension. They will need to know the name of the pension provider and the type of pension, your policy number, and approximate pension value. You can normally find all of these details on your annual pension statement. The new provider will usually then take care of the rest of the process.
The transfer time will depend on a few variables including the providers you are using and the nature of your investments. Some providers are more efficient than others when it comes to handling transfers. If your old pension is in cash, it will most likely take less time to transfer because investments will not need to be sold.
With some providers, you can transfer your investments directly. Transferring an investment directly is known as an ‘in-specie’ transfer. Not all providers allow you to do this, however.
Transferring property and other investments into a SIPP
Before you transfer property and other investments into a SIPP, it’s important to speak to the SIPP provider to see if they accept the assets you wish to transfer. While some SIPP providers permit commercial property transfers, many don’t.
If the SIPP provider does accept the assets you wish to transfer in, you’ll need to complete a SIPP transfer form. On this form, you list the assets to be transferred. The SIPP provider will then advise you on how to proceed.
When can you transfer a private pension into a SIPP?
You can transfer a pension into a SIPP whenever you want to. If you do not want to sell your current pension investments, you may be able to transfer them directly to your SIPP via an ‘in-specie’ transfer. In-specie transfers can involve shares, funds, and property. However, not all providers accept in-specie transfers, so it’s important to check this with your providers.
Transfering a SIPP to another provider
Transferring a SIPP to another provider is generally a very straightforward process. The first step is to complete a transfer form with the new SIPP provider. They will then contact your old SIPP provider and arrange the transfer.
If you wish to do a partial SIPP transfer, you may be able to. However, not all providers permit partial transfers.
Most SIPP providers do not charge fees for transfers in or transfers out. However, some do, so it’s important to check this before you make a transfer. Some providers charge fees for in-specie transfers out. If it’s not possible to make an in-specie transfer, you will have to sell your SIPP investments and this will incur dealing charges.
Some SIPP providers offer bonuses for transfer in. For example, AJ Bell Youinvest currently pays up to £35 per investment moved and up to £100 for general exit fees, up to an overall maximum of £500 per person, if the SIPP being transferred is worth £20,000 or more.
What Types of Investments Can You Transfer into a SIPP?
You can transfer a wide range of pensions and other investments into a SIPP including:
- Old defined contribution (DC) pension accounts. If you have accumulated several DC pensions over the years from past employers, consolidating them into a SIPP is generally a smart move as it’s easier to manage your money.
- Other SIPPs. Combining your SIPPs into one account makes it easier to manage your pension savings.
- Final salary or defined benefit (DB) pensions. It is possible to transfer a DB pension into a SIPP. However, this can be risky and it’s important to understand what you may be giving up in terms of benefits. If your DB pension is worth over £30,000, you’re legally required to work with a financial adviser before transferring your pension to a SIPP.
- Workplace and auto enrolment pensions. It’s usually possible to transfer these kinds of pensions to a SIPP. However, it’s important to assess the pros and cons of doing this. By transferring to a SIPP, you may face higher charges and lose out on employer contributions.
- NHS pensions. You may be allowed to transfer an NHS pension to a SIPP if you have two years or less NHS pension membership.
- Small Self-Administered Scheme (SSAS) pensions. SSAS pensions are pension schemes exclusively for company directors. Transferring an SSAS to a SIPP is usually possible although the process can be complex. It’s worth speaking to a financial adviser first.
- Shares. Transferring shares and other eligible assets that you already own into your SIPP is called making an ‘in-specie’ contribution.
- Commercial property. You may be able to transfer a commercial property you own into your SIPP, using the asset to make a pension contribution in place of a cash contribution. However, not all SIPP providers permit this.
- Here is how to compare commercial SIPP property charges.
Pensions and investments that cannot be transferred into a SIPP include:
- Civil Service pensions. You can transfer Civil Service pensions to other pension schemes but not to SIPPs.
- Cash ISAs. It’s not possible to transfer a Cash ISA directly to a SIPP, however, it is possible to withdraw money from an ISA and then make a contribution to a SIPP with that money.
- Stocks & Shares ISAs. It’s not possible to transfer a Stocks & Shares ISA directly to a SIPP, however, it is possible to withdraw money from an ISA and then make a contribution to a SIPP with that money.
- Lifetime ISAs. It’s not possible to transfer a Lifetime ISA directly to a SIPP.
- An annuity. You cannot transfer an annuity into a SIPP.
What Are the SIPP Transfer Rules for Expats?
You can transfer a SIPP overseas as long as you are transferring it to a Qualifying Recognised Overseas Pension Scheme (QROPS). It’s important to check with the administrator of the scheme you want to transfer to that they will accept the transfer, however. You can find out more about transferring a SIPP to a QROPS.
Those who are non-UK residents may want to consider an International SIPP. International SIPPs were created to fill the gap in the market for UK pension transfers that QROPS could not cater for. They are aimed at non-UK residents who want to keep their pension assets in the UK, rather than transfer to an overseas pension scheme. Like regular SIPPs, International SIPPs are regulated by the Financial Conduct Authority.
If you move overseas, it may still be possible to contribute to a regular SIPP. However, the rules around this are quite complex and depend on whether you still have taxable UK income and how long you have been abroad for. It’s a good idea to check these rules before you move abroad.
No. You cannot transfer a SIPP to an ISA. SIPPs are specifically designed to be retirement investment plans rather than savings accounts.
You can only transfer your SIPP to someone else in exceptional circumstances. The only time you can transfer your SIPP to someone else is in the event of your death and sometimes in divorce settlements.
You can nominate whoever you like to receive your SIPP on your death. This could be your spouse or children, or someone unrelated to you. You don’t need to leave your SIPP to just one person – it can be split up in whatever proportion you like. You can also leave some, or all, of your SIPP to charity. To nominate your beneficiaries, you will need to complete a SIPP beneficiaries form.
The best time to transfer a SIPP will depend on your personal financial situation.
If you have multiple SIPPs or defined contribution pensions, it may be worth combining them into one SIPP. This will make it easier to manage your money.
If you are unhappy with the service provided by your current SIPP provider, it may be worth transferring to another provider that offers more superior service.
Before you begin a SIPP transfer, it’s important to check the fees involved. Some providers charge fees for transfers in and out.
SIPP transfer costs vary depending on the providers.
Many SIPP providers such as Hargreaves Lansdown and Interactive Investor, don’t charge any fees for transfers in or out. However, some providers do charge transfer fees. Some providers, such as AJ Bell Youinvest don’t charge fees for cash transfers out but do charge fees for in-specie transfers out.
Usually, the cheapest way to transfer a SIPP is to select a provider that does not charge transfer fees.