Kirk Rice Blog

Pension Transfers into an Employer SchemeWritten on September 12, 2023 by Kirk Rice LLP

The Question:

I have eight different pension plans and feel I need to simplify this by transferring to my new employer scheme, which has recently started. Do I need advice on pension transfer?

Kirk Rice LLP answers:

Whether or not pension transfers are a good idea is a common question from clients. Kirk Rice offers holistic advice and will want to understand your current circumstances and your future plans and goals. We will want to discuss your plans around retirement ages and what retirement income you will need to achieve to meet your lifestyle and planned expenditure. Depending on the timescale to retirement will determine the amount of risk you need to take to achieve this target.

It is important to note that risk isn’t just about enhancing your pension provision. We also need to consider how you would react to poor market conditions and how much investment experience you have. Capacity for loss is also looked at. To put into perspective, someone who has £100,000 cash on deposit may be able to tolerate a 10% loss in their pension compared to someone who only has £10,000 on deposit. Lots of things are thought about to consider the right investment journey.

Each pension fund would need to be analysed to understand the structure, funds, performance and benefits and to see if any legacy perks are attached to them, such as a Guaranteed Annuity Rate. As a result, we could identify if the plan suits your future plans.

Sometimes, the best advice may be to stay in the existing plans. For example, if the plan offers:

• It has very low charges and is performing well.
• An income guarantee or a Guaranteed Annuity Rate at retirement which would be lost upon transfer.
• Enhanced Tax-Free Cash upon retirement.

Many pensions do not offer Flexi Access Drawdown facilities, and some offer partial flexibility. Whether this is a material fact will depend upon your circumstances. Occupational Pensions do not have to offer any Flexi Access Drawdown.

When making a pension transfer to a new plan, you must regularly review what you are investing in and saving towards. Legislation and tax rules regularly change, and an Employer scheme may also be modified to meet the needs of most employees.

Using an adviser means you will receive a recommendation for each pension and establish anything else you should do now for better financial security.

If you would like to discuss pension transfers or require any other financial planning assistance, please email info@kirkrice.co.uk to arrange a call with one of our Financial Planners. Kirk Rice offers a free no, obligation first meeting and fees and costs of work involved would be discussed. We do not carry out any work without your consent and agreement to fees.

Please note: our articles are for general guidance on the date of publication only and, specific advice should be taken before acting on any of the suggestions made.