Partial Transfer out of scheme while still contributing

RedditchRocket

Hi Everyone,

My finances are generally shot and at 39 the only thing i have going for me financially is investing into a pension which i'm fairly proud of.

I'm contributing a good amount each month via salary sacrifice to my company's group personal pension plan but they've recently written to me telling me they are reducing the number and availability of funds i can invest in and as a result i will have to switch my selections, i'm not happy about the limited range of options through the fund and i'm interested in moving my investments into a SIPP on a one off basis.

My pot is worth about £80k and i'd like to transfer £75k to a SIPP which i've already opened with AJBell Youinvest. I do want the pot to remain open with my existing supplier as future salary sacrifice contributions will be going into there still, i assume this is allowed?

I just contacted the pension company i'm with to see if i could make such a transfer and they are going to send me more information on how i do this and they referred to it as a Partial Transfer but after talking to the Money Advice Service they questioned about transferring out charges, impact on 25% tax status and lifetime allowance implications.

I'm approaching this from a very simplistic position that im essentially just moving where my money is held and it shouldn't impact anything else. I'm keen to read, learn and understand on these issues so i'd be really grateful for your advice on the approach i'm looking to take as above. Anything i should be thinking about or questions i should be asking would be great

Ultimately i'd like to avoid paying a financial advisor loads of money and i'm comfortable with the inherent risks of a SIPP once its in there and i will be looking at a very diversified portfolio.

So yeah fire away if you have a moment, i'd really appreciate it...

AnotherJoe

RedditchRocket wrote: »

Hi Everyone,

My finances are generally shot and at 39 the only thing i have going for me financially is investing into a pension which i'm fairly proud of.

I'm contributing a good amount each month via salary sacrifice to my company's group personal pension plan but they've recently written to me telling me they are reducing the number and availability of funds i can invest in and as a result i will have to switch my selections, i'm not happy about the limited range of options through the fund and i'm interested in moving my investments into a SIPP on a one off basis.

My pot is worth about £80k and i'd like to transfer £75k to a SIPP which i've already opened with AJBell Youinvest. I do want the pot to remain open with my existing supplier as future salary sacrifice contributions will be going into there still, i assume this is allowed?


If the scheme allows it. Sounds like yours does.


I just contacted the pension company i'm with to see if i could make such a transfer and they are going to send me more information on how i do this and they referred to it as a Partial Transfer but after talking to the Money Advice Service they questioned about transferring out charges, impact on 25% tax status and lifetime allowance implications.
I think they must have misunderstood. You are transferring to another pension so there's zero implication for 25% tax free & lifetime allowance. Are there charges to transfer out?


I'm approaching this from a very simplistic position that im essentially just moving where my money is held and it shouldn't impact anything else. I'm keen to read, learn and understand on these issues so i'd be really grateful for your advice on the approach i'm looking to take as above. Anything i should be thinking about or questions i should be asking would be great

Ultimately i'd like to avoid paying a financial advisor loads of money and i'm comfortable with the inherent risks of a SIPP once its in there and i will be looking at a very diversified portfolio.

So yeah fire away if you have a moment, I'd really appreciate it...

A few people at my last employer did this. AFAIK there were no charges to xfer out.
Doesnt sound like that big a deal to me and the "money advice service" (whatever that is) either got the wrong end of the stick or are being all nannyish about it.

ffacoffipawb

My employer pension is run by Aviva and they won't allow it.

We can access the PCLS at 55 though without leaving the scheme.

Bit odd really.

It's a New Generation Group Personal Pension Plan.

greenglide

I seem to recall that the employer needs to "suggest" to the provider that they want this? Since people doing partial transfers out reduces their funds under management the providers may default to not allowing it when the scheme is set up.


It is probably not amongst the obvious questions for an employer to ask when the scheme is set up.

Alexland

My salary sacrifice workplace pension is with Fidelity and under the rules of the scheme they allow partial transfers out. My motivation was to have more choice and lower overall fees. It's enough hassle that I only move a lump sum every few years.

Alex

RedditchRocket

Thanks everyone for the responses, have really helped me in thinking that i'm not trying to do something unusual or bizarre. Our plan is also with Aviva and its a Group Personal Pension Plan which i guess from the interactions does allow these partial transfers. I'll fill in the paperwork now and see how long it takes to complete...

Alexland

I expect it is very unusual for a 30 something to be sufficiently interested in their workplace pension to bother requesting the partial transfer out discharge forms. Still my view is that it is worth doing if you can do better and I am more confident with my investments and saving over £1k pa in fees against the default strategy.

However a little knowledge can be dangerous and some people might end up increasing their costs and/or reducing their investment return through poor investment choices and common behavioral errors.

Alex