Pros and Cons of a Pension Transfer

Introduction to Pension Transfers

Navigating the world of pensions can be a daunting task, with various schemes and options to consider. One common question is whether transferring personal pension schemes is the right move.

In this friendly and jargon-free article, we’ll explore the pros and cons of transferring pension schemes, and discuss the benefits of seeking advice from a chartered financial adviser.

You will have several things to consider if you are thinking about transferring or consolidating your pensions, but it might be helpful to remember that at the end of the day, a personal pension plan is basically a glorified savings account; you put money in now so you can spend it later.

If you have any questions after reading this article please give us a call. We are independent experts with decades of experience in pensions, and we won’t give you any advice on you personal circumstances without a thorough understanding of your needs and wants.

Transferring Pension Schemes: Pros and Cons

Combining multiple personal pension schemes can help streamline your retirement planning by consolidating your investments. Here, we’ll discuss the advantages and drawbacks of transferring pension schemes.

Benefits of a personal pension transfer:

    1. Simplification: Combining multiple pension schemes can simplify your financial planning and make it easier to keep track of your investments.
    2. Lower fees: Consolidating pension schemes may potentially reduce the fees associated with managing multiple accounts.
      1. These fees could be product fees which are paid to an insurance or investment company, or an investment platform.
      2. They could also be the investment management fees you pay for the assets your pension account holds.
      3. Advice fees are typically the same regardless of the other options. See our Charges page for more information on how our advice fees work.
    3. Improved investment options: Some pension schemes may offer better investment choices or more flexibility, which could improve your overall investment strategy.

Disadvantages of a personal pension transfer:

    1. Exit fees: Transferring pension schemes can come with exit fees, which may offset the potential savings gained through consolidation. Most modern pension schemes do not have any exit fees, but there are some companies out there with very high exit charges, so be aware before you commit to any course of action. If you have the option, it can sometimes be be better to delay a transfer to reduce the exit fees.
    2. Loss of benefits: Some pension schemes have unique features or guarantees that you may lose upon transferring. If your pension plan has any guarantees make sure you take extra care to understand what these are before you sign anything. Some older pension schemes have extremely valuable benefits. In many cases we recommend against transferring these types of plans because it can be difficult or impossible to replace the value of what you are giving up.
    3. Market risks: Transferring pension schemes may require you to sell investments and reinvest in a new scheme, potentially exposing you to market risks and fluctuations. If you have the option for an in specie transfer, this can mitigate the risk of being out of the market, but it will depend on the companies you are moving between.

Is Consolidation a Good Idea?

Consolidation can be a wise choice if the benefits outweigh the potential drawbacks, but it’s very important to carefully consider the features, fees, and investment options of each pension scheme before making a decision.

This is where seeking advice from an independent financial adviser can be invaluable. As independent advisers it makes no difference to us where you transfer your pension, as long as we believe it is in your best interests to do so. Our fees are the same no matter who we recommend, if we recommend a transfer at all.

Investment Platforms & Pension Transfers

Years ago, a pension transfer or consolidation exercise meant moving your money from one (or more) pension providers to another pension provider. These companies managed pension schemes which were independent of other savings or investments you might have had.

These days, you can choose from a range of different investment platforms to manage your pensions. These platforms can look after a range of investments like your pension, but also your ISA, investment bonds, and more.

Many investment platforms offer a tiered charging structure, which means the more money you have on their platform in total, the lower the overall charge becomes. This is worth remembering if you have other investment assets. These might already be on an investment platform, or you might be considering further consolidation.

We often recommend investment platforms when they are suitable for our clients, but we keep an open mind about the options available to you from the whole market. Anything we recommend will be based on your personal circumstances.

Do I Need an Adviser to Transfer a Pension?

While it’s possible to manage your pension schemes without professional advice, consulting with a chartered and independent financial adviser can offer several advantages:

    • Expertise: Financial advisers have the knowledge and experience to help you navigate the complexities of pension schemes.

    • Unbiased advice: As independent advisers, they can provide impartial recommendations based on your unique circumstances.

    • Tailored strategies: Financial advisers can develop personalised investment strategies to help you achieve your retirement goals.

    • Code of conduct: As chartered advisers, we are held to a higher standard than most financial advisers. It means our independent advisers have some of the highest qualifications and widest experience available. We also follow a published set of Core Values. All of this together means we are in the top 5% of financial advice firms nationwide.

    • Independent: An independent firm means it is only working for the benefit of our client. We are not owned by an insurance company, and we don’t have any products to sell except our advice. This means we can recommend any product or service we believe is right for you because we believe it is right for you. Perhaps even more important, we are also never under pressure to meet a target or recommend something unnecessary. has a helpful article on how to choose a financial adviser.

Final Salary and Occupational Pension Scheme Transfers

Final salary pension schemes (also known as defined benefit schemes) and occupational pension schemes are typically employer-sponsored. They are not very common today since the introduction of Personal Pensions in 1988, but they often have extremely valuable benefits.

Transferring these types of pensions can be more complex and may require additional considerations.

It’s crucial to seek professional advice before making any decisions, as transferring out of a final salary scheme could result in the loss of valuable benefits.

Specialist qualifications are needed to advise on these types of pension transfers, so make sure that any firm you are dealing with holds these.

Workplace Pension Scheme Transfers

Workplace pension schemes are set up by employers and typically include automatic enrolment for eligible employees. These days, changing jobs is more common, and with so much of our lives being digital, it can be easier than ever to lose track of your pension plans.

If you change jobs, you may need to decide whether to transfer your workplace pension to a new employer’s scheme or a personal pension. In these cases, it’s beneficial to consult with an independent financial adviser to ensure you make the most informed decision.

Workplace Pension Scheme charge are typically quite low, so transferring on the basis of product or investment fees might not be worth it. On the other hand, staying on top of your pensions is very important, so consolidation might be worth it if it means you are more in control of your retirement planning.

Why a Chartered Financial Adviser is the Best Option

A chartered financial adviser is a professional who has met rigorous standards in knowledge, experience, and ethical conduct. By choosing a chartered adviser, you can trust that you’re receiving expert advice from a highly qualified individual committed to acting in your best interests.

BBi Financial Planning has been a Chartered firm since day one as we already had the experience and qualifications necessary to qualify for this high standard.

You can see more about the benefits of using a chartered firm at the Personal Finance Society.


Transferring personal pension schemes can offer several benefits, but it’s essential to weigh the pros and cons carefully. Seeking advice from an independent chartered financial adviser can help you navigate the complexities of pension schemes and make informed decisions about your retirement planning.

Remember, independent advice is key to ensuring that your financial decisions are tailored to your unique circumstances and goals.