We all go through various stages when it comes to our pensions. In our 20’s and 30’s we pay into a pension because we’re told we should, but reaching our 40’s we often start to question what our retirement will look like. It’s at this stage you may wish to transfer your pension and monitor the progress closer.
There are plenty of reasons people wish to transfer their pension in Scotland. You may have switched job and don’t want to leave the pension with the old employer, you may have multiple pensions in various schemes and want a streamlined approach to your retirement planning or you may want to start accessing your money in retirement and wish to consolidate your pensions.
Whatever your reason, at Scottish Pension Advice we offer free pension advice to discuss and explore your options. Once we provide our recommendations you can then decide if you wish to proceed. Free, regulated pension advice is available on 0800 193 8767
Transfer Pensions in Scotland
When you’re considering transferring your pension, the first place to start is to ask if your adviser is regulated by the FCA. All of our advisers are regulated to provide pension advice.
When you first get in touch you’ll speak to our customer care team who will gather information and understand your requirements. A qualified adviser will then call you to discuss the next steps and prepare your free pension report. Often we’ll then arrange a meeting to discuss our recommendations.
Our objective is to ensure you’re receiving the correct pension advice, which is tailored to your personal and financial needs. As a result if we believe transferring your pension is not in your best interests we’ll tell you and explain why.
Defined Benefit Pensions
There are some pensions where, at certain times, it may not be optimal to transfer your pension. For instance, if you’re in good health, in your 40’s and your previous employers pension was a defined benefit scheme then it’s unlikely that it’s in your best interest to switch to a defined contribution scheme. This is because the growth and scheme benefits would typically be better where you currently are.
That’s not to say that you shouldn’t or couldn’t transfer your pension in the future. If you’re 58, have left the employer, divorced and have no spouse then you may want the tax free cash and the ability to manage the pension more flexibly. As such, you could consider transferring a defined benefit pension under these circumstances.
Defined Contribution Pensions
If you’ve had multiple workplace pensions then you may think you need to keep your pension with the old employer. The good news is you don’t! It’s your money and you can transfer it to another pension if you wish.
The process to transfer a workplace defined contributions pension is relatively straightforward. You would need to know your member information, who the pension is with and company some short paperwork. Thereafter, we can help you transfer the funds and help you start to improve your pension opportunities.
If we transfer your pension(s) for you we’ll then complete an Attitude To Risk (ATR) survey to understand how cautious an investor you want to be. If you’re younger and retirement is decades off, then you may decide that you’re a more ambitious investor with your pension as you have longer to recoup the funds. In your 50’s your attitude to risk may reflect a more cautious or balanced investor that doesn’t want to take too many risks, but would like to aim for a steady growth. Your pensions adviser will be able to talk through this stage, if you wish to proceed.
Manage Your Pension
Transferring your pension is just the first stage of the process – it’s then important to maximise your pension to meet your retirement objectives.
Scottish Pension Advice can help you understand what pensions can and can’t be transferred and assist you in the process. If you would like confidential and qualified support please call 0800 193 8767.