Can I transfer my pension myself?

Are you looking to transfer your pension to a new pension company (provider), or maybe consolidate your pensions? Meaning combine your pensions together.

Well, there’s some great news, you can transfer them all yourself by using a personal pension. And, if you pick a good pension provider they’ll simply handle the whole process for you – that’s even better right?

Plus, a top personal pension provider will grow your hard earned money fast, giving you more money when you retire. Happy days!

The hardest bit is simply picking a great new pension provider, but don’t worry, that’s why we’re here. We’ve reviewed all the best pension providers in the UK to make it easy for you to find the best one for you. 

Best personal pensions

The best way to transfer your pension is to simply transfer it to a good pension provider, they’ll handle it all for you, and here they are:

If you want to compare the full range of options, here’s our pensions comparison table.

Prefer to speak to someone?

If you're a bit unsure about pensions and would prefer to speak to an expert, check out Unbiased¹ – it's a free service to find pension experts (financial advisors) in your local area.

Are we on the same page with pensions?

Pensions are pretty complicated, and there’s lots of different types – but don't worry, we'll make sure you know everything you need to.

There’s 2 main types of pensions, which are, private pensions (a pension in your name, private to you), and the government pension (the State Pension), which is what you might get from the government when you reach retirement age, currently 66, but rising to 68 in the future.

The State Pension

If you’ve paid enough National Insurance contributions over the years (at least 10 years, but 35 years to get the maximum amount), you’ll be able to claim the State Pension when you reach retirement age (State Pension age).

It’s currently £221.20 per week, which works out to be a lot less than minimum wage! That’s why it’s recommended you boost your pension savings with a private pension too.

Private pensions

Private pensions are pensions that are in your name (private to you). You choose how much to put in and when to withdraw it (as long as you’re over 55).

There’s 2 different types of private pensions, there’s a workplace pension, which is what your employer will set up for you if you’re employed (called auto-enrolment), and a personal pension, which you can set up yourself.

Note: if you’re self-employed, a personal pension is your only pension option to save for retirement. Learn more with our guide to the best private pensions for the self-employed.

Workplace pensions

If you’re employed, your employer will normally set up a workplace pension for you, unless you opt-out. These are amazing, as your employer has to contribute to it too by law. As long as you contribute 5% of your salary each year, your employer will have to pay in at least 3% too – it’s like a pay rise!

It gets better, your contributions into your pension are also completely tax-free too – they’ll be taken from your salary before you pay tax (so you will pay less tax each pay cheque), and it’s all handled by your employer.

The only downside is you don’t get to decide which pension provider your pension is with – your employer decides this, and often, they’ll just pick one because they have to, rather than researching the best ones out there. Meaning the pension they chose could have high fees and aren't that good at growing your money. And that’s the difference with personal pensions…

Personal pensions

A personal pension is one that you set up yourself, and you look after it (don’t worry, it’s easy to do). And there’s more good news, they’re also tax-free! 

The tax-free part works slightly differently to a workplace pension. With a personal pension, you’ll get a 25% bonus automatically added to your pension, this is from the government, and it’s added every time you contribute to your pension. Yep, we’re not joking!

Why? This is to refund the tax you’ve already paid on your salary, as you can only pay into your personal pension from your bank account, so you've already paid tax through your pay cheque.

And if you’ve paid higher rate tax (40%), or additional rate tax (45%), you can claim this tax back on your Self-Assessment tax return.

Picking the provider yourself is great, as you can pick a provider that’s easy to use, has low fees, and a great track record of growing money over time. We’ve already covered who the best are above, but as a reminder, PensionBee¹ is all of these things (and rated 5 star).

There’s one more great thing about personal pensions too (and workplace pensions), as your money grows over time, it also grows tax-free – this means your money can grow much faster and can compound (grow quicker over time).

If you were investing outside of a pension (or a Stocks & Shares ISA), you might have to pay tax on your profits when you sell investments, or if the investments pay an income. This means your money grows much slower.

Don’t worry about the investing side of things, that’s what the experts are there for. They’ll handle everything with a personal pension. The investments are often called a pension fund, which is lots of peoples money pooled together and managed by experts.

Self-invested personal pensions

There’s also another type of personal pension, called a self-invested personal pension, or SIPP. These work just the same as normal personal pensions, except instead of the experts managing the investments for you, you are making the investment decisions and deciding which investments to make. If you’re not an experienced investor it’s often better to simply let the experts handle things for you with a regular personal pension.

However, having said that, modern SIPP providers are effectively the same as personal pensions – instead of you having thousands of investment options to choose from with a SIPP, they’ll simply offer a few simple options, such as socially responsible investments (like no fossil fuel companies), and then the experts will take care of the rest. By using one of these you'll have a choice about where your money goes and their management fees are normally really low, it's a win-win!

In fact, most of the best personal pensions are actually modern SIPP providers (including PensionBee¹and Moneyfarm¹).

Types of pension schemes

Now let's talk about pension schemes. This bit is really important to know when transferring pensions.

Most pensions are defined contribution pension schemes, which are where you pay some money in (you contribute), and if it’s a workplace pension, your employer will too. 

As you contribute to it, it grows into a nice big pension pot and you decide when to take money out (after age 55). You can transfer these whenever you like, as long as it’s not your current workplace pension with your current employer.

Note: if you want to learn more about workplace pensions, here’s what happens to your pension when you leave a company.

Then, when you retire, you might use your pension pot to buy a guaranteed income every month for the rest of your life (or a set period of time) called an annuity. Or, you could keep it invested and withdraw a regular income too. There’s a few options when you retire.

The alternative is a defined benefit pension scheme, which is common in government jobs, such as the NHS. This is where what you get each month when you retire is determined by things like how long you’ve worked there, and what your salary was.

You can transfer these to a defined contribution pension (a personal pension) if you want to, but it might not always be worth it. 

They’re given a pension transfer value (how much they are worth in cash), and if it’s higher than £30,000, you’ll legally need to get financial advice from a pension transfer specialist, before you transfer it. You can find a financial advisor with Unbiased¹. 

If it’s lower than £30,000, you can transfer it if you want to, although it can still be a good idea to get financial advice.

Should I consolidate my pensions?

It’s often a good idea to consolidate your pensions, which means to transfer them all into the same pension. You can save a lot of time and admin, and ultimately it can mean you can retire with more cash when the time comes, and have a nice big pension income!

And here’s why:

Always remember where they are

If all your pensions are in one place, it’s much easier to remember where they are. You might have had lots of jobs in the past, and have many workplace pensions all over the place – and it’s likely you’ll forget about some of them years down the line. Your pension providers probably won’t get in touch with you by the way, they’d rather you forget about it and they can keep charging fees!

To put it in perspective, there's a massive 1.6 million lost pension pots in the UK according to The Association of British Insurers, that’s as much as £19.4 billion lost!

Having them all in one place also makes it much easier for your family to find them should you pass away. You’ll be able to name a beneficiary who will get your pension after you pass away too. Tip: let them know where to find them when you're alive and kicking!

Keep up to date

Do you know how much is in all your pension? And how much they are growing? With pensions all over the place, it’s hard to work out, and keep up to date. With all your pensions in one place, and with a good provider (such as PensionBee¹), you’ll be able to keep track of your money as it grows any time you like via a phone app or website. With traditional pension providers, you might have to wait for a letter once a year from all of them (how outdated is that?).

Note: not sure how much you’ll need to retire? Here’s how much you’ll need in your pension pot to retire comfortably. Spoiler: it’s a lot! As much as £869,533 for a yearly income of £33,600.

Potentially save on fees

Fees are an important topic when it comes to pensions and growing your money over time – they can eat away at your profit over the years, and make it grow much slower than it otherwise could be!

Your pension grows to large amounts thanks to something called compound interest – it’s simply where the money you make from your pension each year (the interest) begins to make more money for you in the future too. The interest itself makes interest, and this snowballs over and over!

So if you can reduce your fees, you’ll potentially make more in the future as you’ll be making more each year, which then makes more in the future years.

With decent pension providers, they’ll often reduce your fees as you save more with them. So, if you have all your pensions in one place, you’ll have a higher balance and so can potentially benefit from lower fees – meaning a potentially much bigger pension pot when you retire!

Potentially grow your money more

Compound interest also applies to how much your money is growing each year too. If you’re making more with a good pension provider, this can have a huge impact on the total pension pot you’ll have when it comes to retirement.

By choosing a pension provider with a great track record of growing money, it can be a good bet that the good performance will continue into the future (although it's not guaranteed). Even just small improvements vs your current pension provider each year can have a massive impact in the future.

Typically workplace pensions don’t have the best record for growing money (and can have high fees). They’re normally set up by employers who don’t really know what they’re doing, and are forced to open one by law – they just want to tick the box.

By consolidating your old workplace pensions to a modern personal pension, you’re giving yourself the best chance of growing your money much faster and bigger for the future.

Is transferring a pension safe?

Yes, pension transfers are perfectly safe. Your new provider will get in touch with your old provider, and they’ll sort everything between themselves, there’s no middleman involved and you won’t be receiving potentially large amounts of cash yourself. It’s a smooth and safe process.

Pensions are also regulated by the Financial Conduct Authority (FCA). The FCA looks after your pension and makes sure pension providers are handling money correctly, and only approves companies who pass very strict checks.

Your pension is also protected by the Financial Services Compensation Scheme (FSCS), which means if anything happens to your pension provider (very unlikely), you could get up to 100% of your money back.

Although your money is actually held in investments themselves (within pension funds), and these are stored separately with very large banks, the investments are in your name, and can only be returned to you.

How to transfer a pension

It’s super easy to transfer a pension, and/or to consolidate all of your pensions. In fact, you don’t even need to do much at all. All you need to do is find a great new pension provider, for example PensionBee¹, and let them know who your old pension provider(s) are. They’ll handle the rest. 

They’ll get in touch with them, sort out all the paperwork and your pension will simply appear in your new pension account. As simple as that.

If there are any exit fees from your old provider, they’ll let you know how much and if you still want to go ahead. Exit fees aren’t very common these days unless you have a very old pension, and often it’s still worth transferring as your money is likely to grow much faster with a new provider.

Your pension transfer options

There’s actually 2 options to transfer and consolidate your pension, which are:

1. Transfer to a personal pension
2. Transfer to your existing workplace pension

We strongly recommend the first option, transferring it to a personal pension, and we recommend using a top pension provider if you’re not already.

This is because with a personal pension, you get to choose which provider to choose, and the top ones are easy to use, have low fees and a great track record of growing your money. Not to mention easier to track your pension too.

If you transfer your old pensions to your current workplace pension, your money can't be moved until you leave your company. Not ideal! 

You current workplace pension likely won’t be with the best pension provider, so you could be paying lots more in fees than you need to, the investment performance might not be great, and you might not be able to choose how to invest your money – for instance in socially responsible investments (e.g. no fossil fuels).

Over to you

So, there we go. Yes, you can transfer your pension yourself, and it’s easy – simply find a good new personal pension provider and they’ll take care of everything. As simple as that.

It’s a sensible idea to transfer your pensions and combine them into one, you won't forget where they are, and you can check your total balance and performance whenever you like. Plus, you can potentially benefit from lower fees and better investment performance – both of which can have a huge impact on your total pension pot when it comes to retirement.

And that’s all there is to it. If you need a bit of help finding the best personal pension for you, we recommend PensionBee¹ – they’re 5 star rated, super easy to use, have low fees and a great track record of growing money over time. We’ve also put together the best pension providers if you want to view the full range of options. Happy saving!