Pension transfers to SSASs and SIPPs

Published by Kathryn Rushton on

Many members who have a small self-administered pension scheme (SSAS) or self-invested personal pension (SIPP) also have pension savings held elsewhere. The natural question they ask is whether those savings should form part of their SSAS or SIPP as well, by accepting a transfer value and paying it in.

There are a number of factors that you should consider before transferring savings from one pension arrangement to another as it may not always be a good idea to transfer. This briefing note assumes that, if you have a SSAS, it does not provide a defined benefit (DB) on retirement, which is the case in the vast majority of instances and always the case for SIPPs.

Factors for consideration include:

  • Right to transfer and the transfer process
  • Transfers from defined contribution schemes:

            - guaranteed annuity rates

            - protected tax-free cash or pension age

            - exit charges

            - regular charges

            - with profits investments

  • Transfers from defined benefit schemes:

            - loss of guaranteed retirement income

            - investment risk

            - cost

            - need for advice