Transferring pension to SIPP?

I have an active workplace pension with Standard Life that myself and my employer pay into every month on pay day. I am wanting to take better control of what this money is invested in so I am thinking about opening a SIPP.

I am assuming that I can transfer this pension. But what happens to future pension contributions? Will they continue to go into my Standard Life account and I will have to keep requesting transfers every now and then to get the money into my SIPP?

Or am I missing something?

Hi Xenor,

I was in exactly the same situation but with Lifesight. My pension pot is the sum of my contributions through gross salary deducition and my empoloyer´s contribution.

I instructed to transfer the 100% to FT and before they did the transfer, they called me to confirm this was not a scam and I really understood what sending my pension to a SIPP means. Finally, they also asked if I wanted to close my account at Lifesight to which I obviously answered no. Since then, I continue to top up my Lifesight pension month after month.

My plan is, as you say, once I have accumulated a decent amount again, to instruct a second transfer for the 100% of my pot from Lifesight to FT.

The process is long and tedious until they do the transfer but it´s worth it once it´s done. I assume it´s not in their interest to be agile.

Best,

3 Likes

@xenor before transferring it’s worth checking with your employer or Standard Life that you wouldn’t be losing any guaranteed future annuity values or other special benefits that might come with your existing pension scheme.

3 Likes

Thanks. Yeah that does sound like the same situation.

I guess the main thing to check is whether Standard Life will close the account or not. And as @rod said, maybe check with my employer as well. Although it is a defined contribution pension so I don’t think there will be any annuities or special benefits.

I think @Rod refers to specific guaranteed annuity rates they might offer and which other providers might not offer. Ie. A Specific guaranteed annuity of X inexchange for a pension pot of Y, I guess some companies/providers may offer guaranteed rates subject to the service/terms offered. Probably worth checking if that is the case before you move.

1 Like

Hi,

I was in a similar position. I have a workplace scheme through Royal London and simply asked for a partial transfer. The first one was a bit of a pain with them making sure I wasn’t being scammed but since then I’ve had no real issues and have now made 3 partial transfers into my freetrade pot.

2 Likes

Yes @EquityInvestor put it better than I did. I would check in with Standard Life to make sure that there aren’t any special benefits that you’d lose if you transferred away. Some pension schemes have unusual benefits like guaranteed annuity rates, protected tax-free cash, protected low pension age guarantees, waiver of contributions, life assurance benefits, accidental death benefits in addition to death payment, self-investment options, etc. The value of these might mean it worth leaving a pension where it is.

And so these are the questions I asked my provider before I transferred: MEGATHREAD: Freetrade SIPP - #24 by rod Good luck!

2 Likes

Good post in the mega thread. I will contact Standard Life and ask those questions because I’m unsure if there are any benefits like that. If there is, I’ve not been told about them.

How long does a transfer take, assuming everything is good and I initiate the process? I guess it will depend on the pension provider.

:+1: yeah benefits like that are getting less common, but worth checking I think.

Assuming that the answers suggest transferring is sensible, you should expect it to take days/weeks not minutes I’m afraid, and yes it depends on how quickly Standard Life move. I think mine took 9 or 10 days, and I bet there is a thread somewhere here where people were discussing how long it took.

I can’t remember if Freetrade accept “in specie” transfers yet - would guess not, which means SL will need to sell everything first and then transfer the cash.

1 Like

Yeah I figured it might take a few weeks at least. Any quicker would be a surprise but nice.

I don’t think not being able to transfer in specie is much of a loss. My pension is invested in a very low risk fund. Main reason I want to move it, so I can control my investment better.

Nutmeg invests your pension in ETFs, so sometimes you can just live with your current provider :wink:

1 Like

A post was merged into an existing topic: SIPP Ads

I also have an active DC workplace pension with SL and they were being very difficult about it. They first blocked it completely then after I complained said they will allow one transfer in 5 years. Claiming “fund rules” because my employer gets such a big discount on fees. So I guess it depends on which employer fund you’re in. Good luck.

So I messaged them and asked them the questions you asked on your megathread. It seems they only “benefit” I lose is the discount on the fund costs that my pension is invested in. My plan charges are capped at 0.75% per year. I don’t think that matters much if I can earn more by investing my pension better. There is no cost for transferring and no guarantees on the pension.

However, here is the issue. They said that I can’t do a partial transfer and that if I transfer my pension to a SIPP then my account will be closed and my employer will either have to contribute to the SIPP (can they even do that with FreeTrade SIPP?) or they would have to rejoin the Standard Life scheme for me with a brand new plan number. I am not sure that I fancy hassling my employer with that…

I guess if I ever were to leave the company, that would be the better time to do a transfer. But the system seems set up to deter people from transferring out pensions that are being actively contributed to. Not great.

Perhaps this will be improved in time, in the same way that banks eventually made it easy (ier) for people to switch current accounts.

You say your plan is capped at 0.75% but does that include the fee of the fund(s) your pension is invested in? Are you happy with the investment? If not, you should be able to switch to another fund.

As I recall, banks didn’t do this voluntarily: the government compelled them to make it easier. My guess is that something similar will be needed for pension transfers.

1 Like

Yeah I’m pretty sure it includes the fund fee. The fund is ran by Standard Life as the name is Standard Life Active Plus III Pension Fund. It has grown by 3.14% in the last 12 months, 19.97% over 5 years. Not great.

I can change the fund, maybe that is a better way to see higher returns. But I would have liked the ability to invest in some individual stocks as well which you can’t do in their pension plan.

I can’t post the Trustnet link here but here’s a snapshot of what’s in it:

Depending on your age, that could be too many (or not enough) bonds!

1 Like

I don’t know much about bonds, other than that they are a safer investment for older people. I don’t think I’m at that stage yet as I’m in my upper 30s. I certainly don’t invest in any bonds on my non-pension money. There are more risky funds in Standard Life with better returns. This one is rated a 4 out of 7 for risk with 7 being the highest level.