What is pension switching?

Switching your pension to a new provider could help you to build a bigger pot for your retirement plans. There are thousands of different types of pension out there. Some are great, others are not. Switching your pension is all about getting the best possible deal for you. This means: keeping pension charges as low as possible; your investments always tailored to you, and expert support throughout your journey.
Why would I bother switching?
Pension switch means transferring one or more schemes to a new provider. The principle is much the same as switching to a new bank account or energy provider.

Other phrases used to describe pension switch: pension transfer

There’s plenty of time left, can’t I leave checking my pension for another day?
Making small changes to your pension now could make a huge difference to your future. For example, let’s say you could save 1% a year on your pension’s annual management charges but you decide to put off switching for a year – that’s over £520 potentially gone1. Put it off for five years and you could lose over £3,100. Leave it for 20 years and you could have lost a whopping £27,057. The simple fact is the sooner you fix a leaky pension, the better.
So, basically it’s all about how much I am being charged?
The fees you are being charged is just one aspect. Pensions are complicated products with many different elements and it’s all about getting the right balance for you. For example, your pension could currently be shrinking, rather than growing, because of the way it is invested. Or, you might not be able to leave any remaining funds to a loved one when you die – which is far from ideal if this is what you want to do.
Can I switch any kind of pension?
You can switch all private pensions and most employee pensions. You do need to be careful if you are thinking about switching a final salary company pension. These types of schemes generally come with guaranteed benefits when you retire, which you would lose if you were to switch. You cannot switch out of unfunded public sector schemes which cover organisations and professions including the NHS, teachers, armed forces and the police.
There seems to be a lot to consider, I think I’ll stick with what I’ve got
Being completely frank, sticking with what you have got could seriously undermine your plans for the future. Alternatively, it could be absolutely the right decision for you. The issue is not knowing and when it comes to something as important as your pension, is this a gamble you are willing to take? The good news is we can do all of the hard work for you, to see if switching your pension is the right option for you.
Portafina Discovery Cloud
Your questions answered
Is the company regulated?

Regulated financial advisers must be registered with the Financial Conduct Authority (FCA). If they are not listed on the FCA register then they are not authorised to provide advice. Scammers may try to trick people that they are authorised so it is always important to check. Our FCA registration number is 754580.

What will it cost you?
There are two main types of pension: defined contribution and defined benefit. In almost all cases it makes no sense to switch out of a defined benefit pension unless you are looking to access some of your savings early. And even then, it’s rarely the best choice. With defined contribution pensions it’s different. We will review these types of scheme and send you our recommendation free of charge. Our report would clearly state how much it would cost to switch to a better scheme (if we’ve found one for you). You can then choose to walk away with nothing to pay or instruct us to switch your pension. If you choose the latter, any fee would come out of your pension so there would be no extra money to find.
Do you know if you will be giving up any benefits?
Certain pensions – especially final salary company schemes – come with a set of guaranteed benefits, such as a promise to pay you an income for the rest of your life. A financial adviser should make very clear to you any such benefits and advise on whether giving them up is the best thing for you to do or not. Ultimately, you should always have the right information, presented clearly, so that you can make a balanced decision.
If you switch your pension, how will your savings be invested?
The way your money is invested matters. It could be the difference between just getting by and having the freedom to do what you want to do in the future. If a financial adviser cannot clearly show how your savings will be invested and the impact this could have then you should seriously consider not using them.
How will your pension be managed over time?
It is likely that your circumstances and goals will change over time. This is why it is important that your pension is reviewed at least once a year, so that it is always tailored to suit where you are at in life. It’s not worth settling for advice that promises grand changes in the short term but cannot back this up with thorough ongoing management of your pension.
Portafina Discovery Cloud

Stay one step ahead…

with all the facts, stats and insights you need to make the right decisions about your pension.

Portafina Pension Info Guide
How private pensions actually work?
Reviews.co.uk Logo

Dip into a treasure-chest of free downloadable guides.

Portafina Pension Info Download
Kent Mega Growth Logo
Discover your pension options
Call me back Free info pack