In-specie transfers explained: What they mean for your pension assets
Learn about how in-specie pension transfers work, their benefits and risks.
Key points
- In-specie pension transfers allow you to move investments without selling them, helping you stay invested and avoid market timing risks.
- Not all assets or providers support in-specie transfers, and the process can take longer than cash transfers due to manual steps and valuation timing.
- In-specie contributions can be tax-efficient, but they must meet HMRC rules and count toward your annual allowance.
When managing your pension, flexibility and control matter. Whether you're switching providers or consolidating your pension pots, how you transfer your investments can make a big difference. One option may be an in-specie pension transfer.
Unlike a cash transfer, where your investments are sold and the proceeds moved, an in-specie transfer lets you move your existing assets as they are, without selling them. This means you stay invested throughout the process, helping you avoid market timing risks and unnecessary dealing costs.
How in-specie pension transfers work
If you’re considering transferring your pension from one provider to another, you’ll typically be offered two options: a cash transfer or an in-specie transfer.
A cash transfer means selling all of your holdings within the pension and transferring it as cash to buy new investments in your new pension.
In contrast, an in-specie transfer allows assets to be moved as-is. This means they don’t need to be sold. So, the holdings are re-registered in the name of the new pension scheme, allowing you to stay invested during the process. This can be especially beneficial during volatile market conditions.
Not all pension providers or products allow for in-specie transfers and you also can’t do it with all assets. But typically you can make in-specie transfers with:
- unit trusts
- open-ended investment companies
- exchange-traded funds (ETFs)
- investment trusts
- trustee investment plans
- commercial property.
Asset handling in in-specie transfers
When you move your assets between providers, you can risk triggering a taxable event or losing money because of the ups and downs of the market. However, in-specie transfers offer a seamless alternative that can help preserve both the structure and performance of your portfolio.
If dividends or income distributions are declared during the transfer period, they are still payable to the pension scheme. But depending on the timing, they might be received by your original provider and then passed on, or your new provider might credit you when the transfer is complete.
Regulatory and provider requirements
When transferring pensions in-specie, there are a few important rules and timelines to be aware of, both from regulators and pension providers.
The Financial Conduct Authority (FCA) expects pension providers and platforms to support in-specie transfers where possible. However, both the new and old providers need to agree to the transfer, and not all platforms support every type of asset, or in-specie transfers at all.
Each provider will have their own process to handle in-specie transfers, some might be quicker than others and some might only accept certain types of investments. But typically, you can expect:
- cut-off dates – your provider might set deadlines to be completed within a tax year.
- settlement windows – in-specie transfers can typically take longer than cash transfers depending on the assets and provider.
- manual processes – some transfers rely on paper forms, which can slow things down.
If you’re planning an in-specie transfer, it’s a good idea to check with both your current and new providers to understand their processes and how long it might take.
Benefits of in-specie pension transfers
Transferring your pension investments in-specie, can offer several benefits and financial advantages, such as:
- Staying invested without market gaps – no need to sell and repurchase, allowing you to avoid any gaps where you might miss out on market growth.
- Saving money – as you won’t be selling and buying again you might be able to avoid certain charges like dealing charges, bid-offer spreads and other trading costs that might come with cash transfers.
- Keeping your asset allocation – as an in-specie transfer preserves your original asset allocation you won’t need to rebalance your portfolio after the move.
What are potential risks and limitations?
While in-specie transfers offer many benefits, there are a few important limitations you should consider before going ahead.
1. Not all investments qualify
Some funds, shares or other assets can’t be transferred in-specie. This might be because the receiving provider doesn’t support them, or because the asset itself isn’t eligible for re-registration. In these cases, you might have to sell the investment and transfer into cash instead.
2. Possible delays
In-specie transfers can take longer than cash transfers. This is often because of the need to use manual processes, valuation timing, and coordination between providers. Delays can also happen if assets are complex or spread across multiple fund managers.
3. Dividends and corporate changes
There’s also a risk of losing out on dividends or corporate actions (like mergers or changes in ownership) if they happen during the transfer window. Most providers aim to deliver what you're entitled to, but timing issues can cause delays or confusion.
4. Additional fees
You might also find that some pension providers may charge a fee for processing an in-specie transfer, especially if the assets need extra administration. There could also be setup charges from your new provider. So, it’s worth checking the fee schedule before starting a transfer.
In-specie pension contributions
In-specie contributions let you transfer existing investments directly into a pension, without selling them for cash. This can make these types of contributions a tax-efficient way to make use of the assets you already hold.
HMRC allows in-specie contributions to registered pensions schemes, as long as:
- the asset is transferable and valued accurately
- the contribution is made by a relevant UK individual
- the scheme operates under HMRCs relief at source (RAS) system.
You’re able to receive tax relief on contributions up to 100% of your relevant UK earnings, or £3,600 if you have no earnings.
It’s also worth noting that in-specie contributions will count towards your annual allowance, which is £60,000 unless you have a high income or have flexibly accessed your pension. But if you’ve contributed less than your annual allowance, you can carry forward three years’ worth of unused annual allowance to contribute more. Make sure you check your allowance before making a large in-specie contribution, as going over it could result in a tax charge.
Steps to initiate an in-specie transfer
1. Get your investment details together
Start off by getting up-to-date statements for your pension holdings. Your new provider might ask for things like ISIN codes or fund identifiers, and current valuations.
2. Check provider support
Not all pension providers can support in-specie transfers. So, checking this can help you avoid wasting time
3. Complete the transfer forms
Most providers will ask you to fill out transfer forms or use an online portal. Make sure that all details match your investment statements and you’ve signed and dated forms correctly as mistakes or missing information can cause delays.
In-specie pension transfers with Aviva
If you're looking to move your pension investments without selling them, our self-invested personal pension (SIPP) platform offers support for in-specie transfers, helping you stay invested and in control.
With the MyAviva app, it’s easy to manage your pension on the go, switch funds, request transfers, and track its value anytime.
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Transfer your pensions
Moving your pensions into one pot may make them easier to manage – and could even mean lower fees. Investment values can rise and fall. Remember to check for any loss of benefits and exit fees. If you're still unsure, we recommend that you get financial advice first. For some pensions you must take advice before you transfer – there’ll be a charge for this.