Protected Enhanced Tax-Free Sum - Is it worth keeping as is?

hartrima

Hello

I recently looked to initiate a transfer of the fund value from one of my ex company pension schemes into my SIPP. In the course of this transfer I was advised that this scheme gives me entitlement to a protected tax free amount which currently equates to around 37% of the fund value. 

I'm trying to work out if this is enough of a benefit, in my case, to persuade me to keep the pension as is or should I still go ahead and transfer the fund value into my SIPP and lose this protected element. Is anyone able to advise, is my assumption correct that the protected tax free element above 25% would in any case ultimately get included in my lifetime tax free allowance (25% of current LTA = 268,275). If my assumption is correct and as I hope that my combined pension values at retirement will be around the current LTA I see little benefit in keeping the pension as is in order to retain the protected tax free amount so I may as well just go ahead and transfer the value into my SIPP.

For further background the pension in question is relatively small compared to my combined pots (around 8% of the total amount)

Thanks in advance 

Secret2ndAccount

If you are in the region of the LTA, then 8% of your pot is 80k
25% of 80k is 20,000
37% of 80k is 29,600
So the difference is the tax on 9600. If you are a 20% taxpayer in retirement, the gain is 20% of 9600 = 1,920
It's going to be 2.4% of the pot, however big it is.
Do you expect to be able to achieve better growth, or lower costs if you move the pension?