Transferring workplace Pension in SIPP

[xyz123]

Hi, I know this is probably a complicated question for many but am just trying to understand some basics.

I have a defined contribution type workplace Pension with an ex employer. I have no current plans but may retire to the same employer in future. I started paying on 10 years ago and at the time selected retirement age of 55.

Workplace pension has a choice if abt 45 funds, none of which are decent low cost index trackers. Hence the thought of transferring to somewhere else.

I know I can transfer this to SIPP but I don't know what to look out for? I think the age at which it can be accessed is one thing (new SIPP may be 60 vs 54 for my workplace Pension ??). Are there any other downsides in general that I need to find out details for?

Thanks for reading my post

[Boringvolvodriver]

I am not an IFA but I would look out for the costs of the transfer as a starting point.

Without knowing the relative value of each pension and indeed your age, it would be difficult to give any ideas. How long is it until you plan to retire and at what age?

What are the relative management costs of your SIPP v the employer pension? I had an employer pension when I retired and due to the low costs my IFA advised me to leave it with them rather than put into the SIPP they had.

I am sure that somewhere within the 45 funds there would be one or a mixture that would give you what your aims are. Again my IFA helped in this regard.

[thekingisdead]

Things I would look out for:

Some workplace schemes (usually DB, but sometimes DC) had other contractual benefits associated with the scheme, that could be life insurance, guaranteed retirement ages (irrespective of govt legislation) - those are the sort of things you need to be aware you could lose by transferring to a SIPP.

Your provider *should* outline any benefits you're giving up - but you could put it in writing directly "am I losing any scheme guaranteed benefits by transferring out"
If there's a scheme trustee they may also be able to point you in the right direction.

And choose your new platform based on the size of your pension.

Large pot = flat fee's no % based charge
Small pot = % based platform charge

[anonymous-user]

thekingisdead said:

Things I would look out for:

Some workplace schemes (usually DB, but sometimes DC) had other contractual benefits associated with the scheme, that could be life insurance, guaranteed retirement ages (irrespective of govt legislation) - those are the sort of things you need to be aware you could lose by transferring to a SIPP.

Your provider *should* outline any benefits you're giving up - but you could put it in writing directly "am I losing any scheme guaranteed benefits by transferring out"
If there's a scheme trustee they may also be able to point you in the right direction.

And choose your new platform based on the size of your pension.

Large pot = flat fee's no % based charge
Small pot = % based platform charge

Defined Benefit workplace pensions died a death years ago as they were far too expensive to fund.

[xyz123]

Thanks for your replies. It's given me enough to start properly start looking into it.

[bitchstewie]

Check charges benefits and things like whether you have a protected right to access at a certain age that may be less than a SIPP would offer depending on your age.

[craig1912]

Very easy to transfer and I would look at AJ Bell or Vanguard. Currently you can access at 55 but going up to 57 in 2028.

Beginners guide here

https://www.ajbell.co.uk/pensions/sipp/what-is-a-s...

[thekingisdead]

“Defined Benefit workplace pensions died a death years ago as they were far too expensive to fund”

Thank you, I am aware that they are increasingly rare.

My point was that pension schemes with additional / guaranteed benefits tended to be, though not exclusively, defined benefit

[trickywoo]

craig1912 said:

Very easy to transfer and I would look at AJ Bell or Vanguard. Currently you can access at 55 but going up to 57 in 2028.

Beginners guide here

https://www.ajbell.co.uk/pensions/sipp/what-is-a-s...

Interestingly if you had a historical SIPP with Fidelity the age you can access the pension remains 55. I can’t remember the exact date but it was only a few years ago they rewrote their terms which resulted in guaranteeing 55. That is to say if an 18 year old had a SIPP with them then their pension age would remain 55.

I know this because I had a vested interest as I was on the wrong side of the 55 to 57 jump so investigated it at length, with some help from this forum too.

H&L didn’t have the foresight to do this.

It’s not retrospective so isn’t relevant unless you had a historical Fidelity SIPP.