Why can't I transfer out of employer's pension into Vanguard consolidated pot?

Hello

I'm 40 so a few years to go yet before retirement!

A few years ago, I consolidated my old pots into a Vanguard pension. 

I have been told I can't transfer money out of my current employer's pension into this Vanguard pension.  I'd need to wait until I moved employer and it was no longer receiving contributions.  Why is this?  

Thanks
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Replies

  • dunstonhdunstonh Forumite
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     I'd need to wait until I moved employer and it was no longer receiving contributions.  Why is this?  
    Not all pension schemes support partial transfers (in particular older schemes).



    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • penners324penners324 Forumite
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    Employers will only submit to 1 pension account. They have to tell the Prensions Regulator who that is.

    Most pension companies won't let you transfer out while contributions are still being made
  • dunstonhdunstonh Forumite
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    Most pension companies won't let you transfer out while contributions are still being made
    Indeed, under auto-enrolment rules, they cannot transfer fully until the person is no longer classed as an active member.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • KirstenNeilsonKirstenNeilson Forumite
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    Thanks all. 
    Why though?  What is the reason behind this rule?  Who benefits from it?
  • MarconMarcon Forumite
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    Thanks all. 
    Why though?  What is the reason behind this rule?  Who benefits from it?
    Pension scheme administration is massively more complex than, say, a normal savings account with a bank or building society. Add in the prescriptive rigours of auto-enrolment and things get even more complicated. As dunstonh points out above, many schemes are running very old software, and the cost of updating to meet the needs of a tiny minority would mean increased costs for everyone.

    Not sure why you want to transfer your current pension scheme to Vanguard. I can understand consolidating previous pensions into the same pot (does help to keep track!), but give you are still paying in to this one, you know where it is... Maybe look at changing your fund choices within your current scheme if that's also a driver behind wanting to transfer? 
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • KirstenNeilsonKirstenNeilson Forumite
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    Thanks guys. 
    Interesting, so things may change in the future. 
    I'm just a big fan of Vanguard and it has more choice re funds than my employer's provider. 
  • Pat38493Pat38493 Forumite
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    Thanks guys. 
    Interesting, so things may change in the future. 
    I'm just a big fan of Vanguard and it has more choice re funds than my employer's provider. 
    Have you checked whether you can move the funds in your employer scheme into Vanguard funds without transferring?  Many employer pensions allow you to control which funds your pension is actually invested in and so you might still be able to invest your money in a vanguard fund (or something very similar) without transferring out.
  • edited 12 January at 11:21AM
    dunstonhdunstonh Forumite
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    edited 12 January at 11:21AM
    I'm just a big fan of Vanguard and it has more choice re funds than my employer's provider. 
    And I am a big fan of whole of market platforms that have tens of thousands more investment options than Vanguard.   However, that doesn't mean you are going to use them all and most half decent workplace pensions have sufficient investment options that are comparable to what you are likely to use.

    Even if you could do a partial transfer, the time out of the market could cause you a loss that you never recover in the alternative.   

    So, look at what your scheme has and look for comparable options.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • edited 12 January at 10:01AM
    artyboyartyboy Forumite
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    edited 12 January at 10:01AM
    dunstonh said:
    I'm just a big fan of Vanguard and it has more choice re funds than my employer's provider. 
    And I am a big fan of whole of market platforms that had tens of thousands more investment options than Vanguard.   However, that doesn't mean you are going to use them all and most half decent workplace pensions have sufficient investment options that are comparable to what you are likely to use.

    Even if you could do a partial transfer, the time out of the market could cause you a loss that you never recover in the alternative.   

    So, look at what your scheme has and look for comparable options.

    To be fair, my own current employer's scheme has a very narrow set of funds to choose from, which is a bit ironic given it's one of the world's biggest banks. And despite the fact that they cover all fund/administration charges themselves, I'd still rather transfer to Vanguard, if it was a straight choice between the two of them...
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