How to check your pension benefits before transferring

Let’s find out more about checking pension benefits before transferring a pension. If there are any terms you don’t understand here you can check out our jargon buster.

Usually, you’re sent a pension statement yearly giving you a few details, it may include:

• your pension value.
• an overview of how your investments are performing.
• a projected value of your pension for your chosen retirement age.
• a breakdown of all the payments made into your pension.
• general information about any scheme changes or changes to pension rules.
• any charges associated with your pension.
• details on the ways you can take your pension at retirement.

If you’re thinking of transferring your pension, you should ask for a pension report and a transfer value (CETV) from your current provider. It will give the information above and have the details of any benefits you might lose in the transfer, plus any exit fees. If you want to go down the paper route to transfer, you’ll also get the documents you need. 

A pension with a safeguarded or protected benefit is one that comes with some form of guarantee or promise. There are five common types: 

• Defined benefit pension or final salary – These will offer you an income based on your length of service working for that company and/or the salary that you’re earning when you leave employment. 
• Guaranteed annuity rate (GAR) – Some pension plans had a guaranteed annuity rate written into the terms and conditions when they were set up. It sets the rate at which your pension pot will be converted into an annuity income, payable for the rest of your life. It could give a higher yearly income than today's rates.
• Guaranteed minimum pension (GMP) – This is the income a workplace pension must pay you because some of your National Insurance contributions were paid into the scheme for a particular period rather than to the government.
• Protected retirement age (PRA) – Since the retirement age changed, some pensions may benefit from a PRA allowing them to still take their pension earlier than the normal minimum pension age (currently age 55 but rising to age 57 from 6 April 2028).
• Protected tax-free lump sum – This allows you to withdraw a portion of your pension without paying tax, this typically exceeds the standard 25% limit. 

It’s important to understand whether you have any of these benefits if you’re considering transferring, as they usually are not transferable and may be lost when your pension moves to your new provider.

You might be able to see your pension benefits anytime if your provider offers an online service for you to view your pension details. But finding out things like whether you have safeguarded benefits, or protected benefits could require a phone call, as usually these are written into the terms and conditions and may not usually be as easy to spot.

If you’re just looking at your pension value, however, this should be easily accessible by logging in online, like with MyAviva. Your provider might offer a visual on how your pension has performed in the ways of a graph, giving you the ability to notice dips and peaks throughout the lifespan of your pension. When you see this remember, the value of investments can go down as well as up, and you may get back less than you've paid in.

If you’d like projected values of your pension, check out our retirement planner. You don’t even have to have a pension with us to get started.

There’s three ways you can transfer a pension:

• Cash transfer – Your pension investments are sold, and the cash value is then transferred to your new pension provider to then purchase new investments.
• Overseas transfer – If you no longer live in the UK then you might choose to transfer your pension over to a provider in the country you now live in. Not every country has providers that will take UK based pensions, but you can check on the governments recognised overseas pension scheme (ROPS). ^{Footnote [1]}  
• In specie transfer – In some cases, you may be able to transfer your pension within its investment rather than as cash. 

Every option has its pros and cons - like the amount of time your pension will be uninvested in the case of a cash transfer. Which one your transfer will use will depend on things like your investments and provider.

Seeking professional financial advice when transferring

Getting regulated financial advice on your pension isn’t only important when considering making changes, sometimes it’s actually required by law. If you have any safeguarded benefits, such as a defined benefit pension government regulations require you to get advice if your pension has a total value of more than £30,000. 

Having an advisor by your side when transferring can lift a weight off your shoulders. If you have them from the start of your transfer journey, or you generally don’t know where to start, they’ll be able to advise whether it’s in your best interest or not. They can also begin the transfer itself. They’ll help you build an investment portfolio that suits the way you feel about risk (whether you’re happy with risk or not, or want a bit of both). If you continue to use them in future, they can also help with changing your investments if your needs change. 

Finding an advisor may seem daunting, but it doesn’t have to be. What’s most important is that they’re right for you. Here are four ways you can find one:

• Right here. The Aviva Financial Advice team can support you on your pensions, and investment products. You’ll need pensions or investments worth at least £150,000.
• MoneyHelper is government-backed service, offering support and guidance on all things money. With guides, tools and calculators and support online and over the phone.
• Pension Wise is a free, government-backed service that is part of MoneyHelper, that offers clear, impartial and specialist guidance on your retirement options. You have to be aged 50 or over to access this service, and have a UK-based defined contribution pension pot.
• Unbiased can match you with an adviser in your local area, after you answer a few questions about what you want from advice, and your current situation. Meaning you’re matched with the best person for the job. There will be a charge for advice.

Understanding the impact of fees and charges

Some providers might have fees when it comes to transferring. They’ll usually let you know of this upfront, and will give you a quote as part of your benefit statement so you can see how much it may be to transfer.