How Could I Take Advantage Of A Pension Transfer?
The process of a pension transfer is simply transferring the value of the contributions in one fund to another. The contributions you have made up until that point will be moved to your new provider through the pension transfer – from here on your contributions will all go into the new pension provider.
What are the typical reasons that individuals choose a pension transfer?
There are numerous of reasons which could prompt someone to choose a pension transfer, below are just a few:
•Their present pension plan is underperforming and will not provide them with enough money on retirement
•You are currently in a pension plan where the fees are high
•You've found a provider who provides a better return for the contributions you make
•They've several different plans and want to transfer their pensions to one manageable provider
•They have changed their employment
A financial advisor should be able to help you find out about the advantages and disadvantages of a pension transfer and help you to establish whether or not this will benefit you financially in the long term. Before making any final decision make sure that you have considered both advantages and disadvantages. Deciding whether a pension transfer is going to be advantageous for you can be complicated so ensure you consult a pension specialist.
Are there any pitfalls associated with pension transfer?
As with most financial decisions there is some risk associated with pension transfer. This is the reason it is crucial to give it in depth consideration:
•That you won’t trigger any penalties if you decide to transfer your pension from one scheme to another
•You could discover the value of your pension fund reduced because of the transfer
•You could potentially lose benefits that you are not aware of
What can you potentially gain from a pension transfer?
Alongside the risk associated with pension transfer there are a number of benefits. If you are seeing an expert financial advisor they will be able to help you weigh up whether a pension transfer will be right for you. The key benefits may be:
•The consolidation of various pension schemes into one manageable scheme
•If you have a plan that has underperformed, through pension transfer it is possible to find a plan that will give your more return when you do decide to retire
•You can receive improved benefits with a new pension provider
•You may get a reduction on high charges you have been paying on any other pension schemes you might have
Can anyone have a pension transfer?
Many people don’t know that they are even allowed to transfer their pension – and people have the right to move it. A financial advisor can help you understand whether you can make use of a pension transfer and ensure you don't find yourself out of pocket.
This article was written on behalf Robert Bruce Associates, independent financial advisors specialising income drawdown and pension transfer. For more details, please visit www.rbaifa.co.uk
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