Transferring to a SIPP can be a bit daunting at first. But it’s actually a very straightforward process – and your new SIPP provider usually does most of the legwork.
But there are a few things to keep in mind before you start, and some common questions that we answer in this guide.
We cover all types of SIPP transfers in this guide and go into lots of detail – use the interactive contents table to skip to a specific question if you need to!
However, if you find the decision overwhelming or just want peace of mind you’re doing the right thing, we recommend speaking to a SIPP adviser like ourselves. Book a free, initial consultation with an adviser to see how we could help.
- Can I transfer my pension into a SIPP?
- How does it work?
- How much can I transfer to a SIPP?
- How do I transfer my SIPP to another provider?
- How long does a SIPP transfer take?
- Should I transfer into a SIPP?
- How easy is it to transfer a SIPP?
- Can you transfer a SIPP in drawdown?
- How much does it cost to transfer a SIPP?
- Do I need a financial advisor to transfer my SIPP?
- How much does a SIPP transfer advisor charge?
- Can a SIPP provider refuse a transfer?
- Is it worth transferring my SIPPs into one?
- What is SIPP consolidation?
- SIPP transfer cashback offers
Can I transfer my pension into a SIPP?
Yes, you can transfer your pension into a SIPP.
This process is known as a pension transfer, and it involves moving your retirement savings from one pension scheme to another.
Your new SIPP is known as the receiving scheme, and the old scheme is known as the transferring scheme.
It’s important to note that when you transfer your pension into a SIPP, you’ll be leaving the transferring scheme and any benefits or guarantees associated with it.
If you’re not sure whether you have any guaranteed benefits attached to your pension, you can call or email your provider to ask. If you’re still unsure, it’s worth speaking to a financial advisor such as ourselves before making a final decision.
How does it work?
First, you’ll need to choose a SIPP provider and open an account.
You don’t usually need to add any money to your SIPP to open one.
You can then start the transfer process via your new SIPP provider’s website.
You’ll need to complete an online form with some details about your current pension (e.g., your reference number, an approximate value, and some other details about your current plan).
After this, you’ll usually be sent a form from our new SIPP provider to sign and return. Depending on your preferences, this can be posted or e-mailed to you, but you’ll typically need to provide a wet signature to authorise your transfer.
Send this form back to your new provider, and they’ll handle your SIPP transfer from there.
They’ll typically send your signed instruction to your current pension provider with their own covering letter and instructions.
If both your new and current pension providers use Origo Options (an electronic pension transfer service) then the whole process can happen electronically, saving a lot of time – some pension transfers can complete in just a few weeks if completed online in this way.
If not, pension transfers can take longer – usually 6-8 weeks – but even longer in some cases depending on the responsiveness of each provider and any issues that crop up.
You shouldn’t need to chase your new SIPP provider during this time as they’ll have an automatic process in place and should keep you updated, but you can always check in with them for updates if you need to.
In-specie vs Cash SIPP transfers
Transferring your pension assets ‘in-specie’ can take longer compared to selling your investments and transferring the cash.
In-specie means that your investments aren’t sold, and their ownership is re-registered to your new SIPP Trustees via the registrars – it takes longer and can be more expensive, but some people prefer not to miss out on any market movements while they transfer (remember these can be both up and down).
Generally, transferring as cash is the more popular, cheaper and easier option. You also may be re-investing your assets when they arrive anyway, so they need to be sold regardless.
How much can I transfer to a SIPP?
There is no limit to the amount you can transfer to a SIPP.
You can also transfer multiple pensions and SIPPs to a new SIPP – known as pension consolidation. The benefit to this is having all of your pensions in one place, so you can easily manage your investments and drawdown payments.
It can also be cheaper too if you’re using a cost-effective SIPP provider and investment portfolio.
How do I transfer my SIPP to another provider?
To transfer your SIPP to another provider, you’ll need to follow the same process as transferring your pension into a SIPP for the first time.
This process involves opening a new SIPP account with your new provider, filling out a transfer form, and authorising the transfer.
How long does a SIPP transfer take?
SIPP transfers typically take 6-8 weeks.
However, it can be slower or quicker than this depending on whether you transfer as cash or in-specie, the type of investments you hold, and how busy and responsive each SIPP provider is.
Also, if both SIPP providers can facilitate transfers via Origo Options (an online pension transfer service), then pension transfers can be much quicker as they can be arranged completely online.
Your new pension provider should keep you updated with progress on your transfer and keep you notified of how long it will take.
Should I transfer into a SIPP?
The decision to transfer into a SIPP is a personal one and depends on your individual circumstances and retirement goals.
Some people choose to transfer into a SIPP because it provides them with more control over their retirement savings and allows them to invest in a wider range of assets, such as stocks and shares.
Others choose to transfer into a SIPP because it provides them with access to more flexible retirement options, such as income drawdown.
However, it’s important to note that transferring into a SIPP is not suitable for everyone and comes with a range of risks, including the risk of losing money if your investments go down.
Before making a transfer, it’s important to consider your retirement goals, your attitude to risk, and your overall financial situation. It’s also good to seek SIPP advice if you’re unsure about whether a SIPP transfer is right for you.
How easy is it to transfer a SIPP?
Transferring a SIPP is relatively easy – it’s usually only one form to complete with your new provider, and they can talk you through it over the phone if you get stuck. It can take several weeks, but you shouldn’t need to do anything during the process so it’s usually relatively stress-free.
However, it’s important to understand the risks and charges involved and to seek financial advice if you’re unsure about whether transferring to a SIPP is right for you.
It’s also important to choose a reputable SIPP provider and to ensure that your new SIPP is suitable for your individual circumstances and retirement goals.
Can you transfer a SIPP in drawdown?
Yes, you can transfer a SIPP in drawdown.
It’s important to note that if you’re transferring a capped drawdown into a flexible drawdown plan there can be some tax repercussions.
Once you take income from a flexible drawdown SIPP, your contributions into your SIPP, or any other money purchase pension schemes, will be restricted by the Money Purchase Annual Allowance (MPAA) – currently £10,000 per tax year. So, you won’t be able to add more than this back into a SIPP.
If you’re not sure how this affects your retirement plan, you may want to speak to a financial advisor for help.
How much does it cost to transfer a SIPP?
The cost of transferring a SIPP varies depending on the SIPP provider you choose, your existing SIPP provider, and the complexity of the transfer.
Some SIPP providers charge a transfer fee, while others don’t.
Also, you need to check with your current provider as to their transfer-out charges.
Some pension providers won’t charge you or will just charge a flat exit fee. However, others charge a fee per line of stock you transfer out or sell, so it’s important to check that you’re transferring in the most cost-effective way possible.
Calling your pension provider or e-mailing them and requesting a detailed explanation is a good way to get information to make an informed decision. And as always, if you’re unsure, speak to an advisor.
It’s also worth checking with your new SIPP provider to see if they’re willing to cover the transfer out charges of your current SIPP. Some may agree to pay for the costs as a welcome gift!
Do I need a financial advisor to transfer my SIPP?
No, you don’t need financial advice to transfer your SIPP or transfer a money purchase pension into a SIPP.
However, if you have a Defined Benefit pension (also known as final salary) you may not be able to transfer to a Defined Contribution scheme like a SIPP. If you’re considering transferring a final salary or DB pension, it’s strongly recommended you seek financial advice as it’s a much more complicated process and decision.
Even for a standard SIPP transfer, a financial advisor can help you understand the risks involved and ensure that your new SIPP is suitable for your individual circumstances and retirement goals, as well as the underlying investments.
They can also help you compare the costs and benefits of different SIPP providers and to choose a SIPP that meets your specific needs and goals.
How much does a SIPP transfer advisor charge?
A SIPP transfer advisor would typically charge between 0.5% and 1.5% of the value of your pension.
However, they may also charge a flat fee ranging from £500 – £1,000.
If you’re getting ongoing financial advice including investment advice, retirement planning, and tax planning, then the cost of advice could be higher.
The cost of a SIPP transfer advisor also varies depending on the advisor you choose and the complexity of your transfer. It’s worth comparing the costs of different advisors and understanding the full range of costs involved before making a decision.
Can a SIPP provider refuse a transfer?
Yes, a SIPP provider can refuse a transfer. However, this is rare, and SIPP providers are generally required to accept transfers from other pension schemes.
If a SIPP provider refuses a transfer, it’s important to understand the reasons why and to seek financial advice if necessary.
Is it worth transferring my SIPPs into one?
The decision to transfer your SIPP into one is a personal one and depends on your individual circumstances and retirement goals, but it is a popular option.
Consolidating your SIPPs into one account can make it easier to manage your retirement savings and investments, and make it more practical to start income drawdown and taking your tax free cash.
Consolidating your SIPP into one account can also result in cost savings, as you’ll only need to pay one set of fees and can opt for the cheapest provider.
What is SIPP consolidation?
SIPP consolidation is the process of transferring multiple SIPPs into one SIPP account. This can make it easier to manage your retirement savings and can result in cost savings, as you’ll only need to pay one set of charges.
Additionally, SIPP consolidation can provide you with a more comprehensive view of your retirement savings, making it easier to understand your overall financial situation and plan for retirement.
SIPP transfer cashback offers
Some SIPP providers may offer cashback or other incentives for transferring your pension into a SIPP.
It’s important to understand the terms and conditions of these offers and to ensure that the SIPP you’re transferring to is suitable for your individual circumstances and retirement goals.
Before accepting a cashback offer, it’s important to consider the risks involved and to compare the costs and benefits of different SIPP providers.
Stop and think: Is the cashback reward going to be outweighed by higher ongoing SIPP charges or trading fees?
Can I transfer my SIPP into an ISA?
No, you can’t transfer your SIPP into an ISA. SIPPs and ISAs are different types of investment accounts, and you can’t transfer money from one to the other without completely removing funds from the tax wrappers first (which leaves no benefit to transferring).
Can I transfer my SIPP to my child?
No, you can’t transfer your SIPP to your child. SIPPs are personal pension plans, and they can only be transferred to another pension scheme. You can set up a Junior SIPP for your child to start them on a savings plan early and even benefit from tax relief.
Can I pay into 2 SIPPs?
Yes, you can pay into multiple SIPPs, but you need to keep an eye on your annual allowance and not exceed it.
Can I take all my SIPP as a lump sum?
Yes, you can take all of your SIPP as a lump sum, but this may result in a significant tax liability.
You can take 25% of the total value of your SIPPs tax-free, and then it’s charged as income.
So if you take it all in one tax year, it’s the equivalent of earning that amount in one year and your charged income tax accordingly. It’s usually more tax-efficient to take your SIPP income over multiple years to make use of multiple tax allowances.
Can I transfer my SIPP myself?
Yes, you can transfer your SIPP yourself. You’ll need to contact your new SIPP provider and request a transfer – they will then administrate your transfer on your behalf and you don’t necessarily need a financial adviser.
Can I transfer money from my SIPP to my spouse?
No, you can’t transfer money from your SIPP to your spouse. SIPPs are personal pension plans, and they can only be transferred to another pension scheme.
Are pension transfers safe?
Yes, pension transfers are generally safe.
But it’s also important to be aware of the potential pension scams out there.
If you’re unsure about what you’re doing during any stage of the process, speak to an IFA for independent advice.