Do I need financial advice to transfer my pension?

Thinking about transferring your pension? Moving or combining pensions can be a smart way to get more control over your retirement savings - whether you’re looking to cut costs, simplify your finances, or unlock better investment options. But it’s a decision that should not be rushed. It has the potential to shape your retirement income for decades.

Before making any moves, it’s essential to understand when financial advice is mandatory, when it’s a wise choice, and how an adviser can help you navigate the transfer process with confidence that you’ve made the right call.

We hope you find this article helpful, but it’s not personal advice.

When is financial advice required to transfer a pension?

In some scenarios, getting professional financial advice isn’t just a nice to have, it’s a legal requirement. That’s because with certain pensions, transferring could mean giving up valuable guarantees or benefits. You will need advice from a qualified financial adviser if the pension you’re looking to transfer is one of the following:

1. You have a defined benefit (final salary) pension

If your defined benefit pension is worth £30,000 or more – a lump sum referred to as a CETV (Cash Equivalent Transfer Value) – and you want to move it to a defined contribution scheme like the HL SIPP, you must take advice.

Why? Because you’d be swapping a guaranteed income for life Although you’re not bound to follow the advice, the rules say you must take it before the transfer can go ahead. Although the industry consensus is that, for most people, these gold-standard pensions are best left untouched, exceptions may apply in cases of serious ill health or significantly reduced life expectancy.

2. Your pension has safeguarded benefits

Some older pensions come with valuable features like guaranteed annuity rates or other guaranteed benefits. If these benefits are worth over £30,000, you’ll also need to take financial advice before transferring.

3. You want to transfer a pension overseas

If you’re planning to transfer a UK pension scheme to an overseas scheme, such as a QROPS (qualified regulated overseas pension scheme) and your pension has safeguarded benefits, then advice will be required. If it doesn’t, seeking the help of an adviser is strongly recommended to avoid falling afoul of HMRC rules – and any surprise tax bills.

Can I transfer my pension without financial advice?

If you’ve got a defined contribution (DC) pension without any special guarantees, you can usually transfer it without taking advice. However, you should feel confident making your own investment decisions. DC pensions are based on how much you and any employer pay in, the investment returns you achieve, and any charges. They’re generally more straightforward to move between providers, including into a SIPP (Self-Invested Personal Pension).

Most pension transfers happen as cash, meaning your investments will be sold during the final stages of the transfer and the proceeds passed to your new provider. This means you’ll be out of the market for a short period of time. This could work in your favour if markets fall, but if they rise, you may miss out on potential gains. Make sure that you’ve given your new provider clear instructions on how to invest the money as soon as the transfer completes.

Alternatively, it may be possible to transfer your investments as they are, to your chosen provider – known as an in-specie or stock transfer. First, confirm that your new provider will accept the specific investments you hold. Then check that you’re happy with any associated fees that apply. Because of the nature of moving stocks, this type of transfer usually takes longer to complete than cash transfers, and you won’t be able to make changes to your investments once the process has started.

Three steps to transfer a pension

1. Check for exit fees and potential loss of benefits with your current provider.

2. Choose your new provider – look for one that offers investment choices to suit your needs, retirement flexibility, and the control you desire. Don’t forget to compare fees and customer reviews.

3. Complete your transfer request – most providers let you do this online in minutes. You’ll need your policy number, estimated pension value, and personal details (make sure they match your existing provider’s records). Then wait for the transfer to complete.

More on transferring to the HL Self-invested Personal Pension

Should you transfer your pension?

How can a financial adviser help with a pension transfer?

If you’re not sure whether transferring your pension is the right decision for you and your retirement, speaking to an adviser can provide valuable guidance – far beyond a tick box exercise. They will guide you through the finer details and help you make a decision with confidence. A quality financial adviser will:

• Flag any guarantees or benefits you’d lose by transferring

• Explain any risks, including being out of the market during a cash transfer

• Uncover any hidden charges and costs

• Assess whether the transfer supports your long-term financial goals

Before recommending a transfer, a financial adviser will do a thorough review of your finances, taking the time to understand your income, savings, and retirement timeline, as well as your personal aspirations for later life and goals for your loved ones.

An adviser will step back to view the full picture and align it to your vision for the future. Your health and life expectancy may also come into play. For example, if you have a shortened life expectancy, giving up a secure guaranteed income for a more flexible DC pot may be more suitable.

Whether you want to retire early, combine multiple pensions, take flexible withdrawals, or review the suitability of your investments, an adviser will build a tailored plan aligned to your risk tolerance and life goals.

How do I find a qualified financial adviser?

If you’re paying for advice, it’s important to ensure you feel comfortable around your adviser, as well as ensuring they are authorised and trustworthy. Use the FCA Register to quickly check if an adviser is authorised to provide advice. For pensions with safeguarded benefits, the adviser must be a qualified pension transfer specialist. Always ask for a clear breakdown of all costs up front before committing.

Be cautious of unsolicited offers promising early pension access, guaranteed returns, or unusual investments - these are common scams.

All our HL financial advisers are FCA-authorised, and HL is a regulated pension provider.

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