Your pension is likely to be your largest source of retirement savings.
As such, you’ll want to be sure it’s working hard for you – delivering strong investment returns, offering competitive charges, and aligning with your goals.
If you’re unhappy with any of these elements, it might be time to consider a transfer.
While this is possible, there are certain factors to consider before you proceed.
Read on to find out about four important points to take into account for a successful pension transfer.
Careful planning and due diligence can help your pension transfer work for you
If you decide you’d like to transfer your pension, it’s important to do this with your eyes wide open, as a hasty or poorly informed transfer could quickly backfire.
In fact, according to PensionsAge, savers are thought to have missed out on £1.7 billion due to poorly informed transfers in the 18 months to June 2025. It also reported that 53% of pension savers don’t understand how pension transfers work.
Making a well-informed pension transfer, however, could help you reap the rewards if you put in some time and due diligence upfront.
1. Consider the charges
Pension charges vary, and it is a good idea to check whether a new scheme’s fees are higher than your existing charges. These can take the form of an annual management fee to your provider, transaction costs if you switch funds, or an inactivity fee for pensions you no longer pay into.
Some providers will charge you an exit fee when you move money from your pension pot. Although the Financial Conduct Authority (FCA) has banned these for new schemes, if your money is in an old pension, they may still apply, so it’s worth double-checking.
Exit fees are capped at 1% for savers over 55, so even if they are applicable, it may still be worth transferring your pension if the other benefits outweigh this cost.
2. Ask yourself if a transfer could be a scam
While there are often genuine benefits to pension transfers, it’s important to make sure that you’re not falling foul of a scam.
According to MoneyMarketing, pension scams cost consumers over £26.4 million between 2020 and 2022, with 1,595 cases reported in England and Wales.
There is also a high emotional cost associated with scams, as losing money through this type of fraud can be very upsetting, to say the least.
However, the FCA has introduced checks and balances, meaning you no longer have the automatic right to transfer your pension.
If your pension provider notices any red flags associated with your proposed transfer, the trustees now have the right to halt the transfer.
These red flags include:
- A guaranteed better return on your savings
- High-pressure sales tactics
- Promises of early release of funds; you can’t access any of your pension funds until the age of 55, rising to 57 in 2028
- Unusual investments, as these tend to be both unregulated and high risk
- Complicated structures
- Several intermediaries or groups taking fees.
If you’re not sure about the legitimacy of a pension transfer, please talk to us before taking any action.
3. Check which type of pension you have and if you will lose any benefits
A defined benefit (DB) pension scheme generally provides a guaranteed income for life. It might have other benefits too, such as favourable death in service payouts, and is generally seen as the gold standard in pensions. For this reason, transferring out of one isn’t easy.
In some cases, such as schemes for teachers, civil servants, and NHS workers, you won’t be able to transfer your DB pension into a defined contribution (DC) scheme at all.
If you are eligible to transfer your DB pension into a DC scheme, this is subject to certain criteria. FCA requirements mean that advisers must automatically assume this move wouldn’t be beneficial, and your financial circumstances would be subject to a rigorous audit before a move could be approved. If you’re seeking to move a DB pension of over £30,000, you’re also required to take financial advice.
While there could be some potential benefits to shifting from a DB to a DC scheme, it’s very important that you also understand any possible negative implications.
Get in touch
Transferring your pension can be complex, and there are pros and cons associated with different schemes. If you’d like to talk to us about whether you could benefit from a transfer, please get in touch by emailing hello@fingerprintfp.co.uk or calling 03452 100 100.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Workplace pensions are regulated by The Pensions Regulator.
Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.