Transfer pension after retirement

zooks

Hi, I tried a search on this but did not find anything relevant to my situation.

I retired early 2 years ago and took my 25% lump sum and DB pension from my then current employer.

Since retiring I have been contacted regarding 2 small pensions I had forgotten about.

A DB pension with Babcock offering me a transfer out value of £9k

A DB pension with Railpen, no transfer out value received yet but would predict its going to be less than £5k

These are both so low a yearly pension that i'm thinking of transfering them out. Is it possible to transfer them to a SIPP as I already draw a pension or would I have to take it as cash?

If I have to take it as cash do I get taxed on all of it or 75%?

Thanks for reading

DRS1

Are the schemes offering a transfer value or a trivial commutation lump sum?

What would the annual pensions be how would they increase in payment and what death benefits do they carry?  The pension may start low but it could be more valuable than you think.

Marcon

zooks said:

Hi, I tried a search on this but did not find anything relevant to my situation.

I retired early 2 years ago and took my 25% lump sum and DB pension from my then current employer.

Since retiring I have been contacted regarding 2 small pensions I had forgotten about.

A DB pension with Babcock offering me a transfer out value of £9k

A DB pension with Railpen, no transfer out value received yet but would predict its going to be less than £5k

These are both so low a yearly pension that i'm thinking of transfering them out. Is it possible to transfer them to a SIPP as I already draw a pension or would I have to take it as cash?

If I have to take it as cash do I get taxed on all of it or 75%?

Thanks for reading

The fact you are retired/ already drawing a DB pension (which you can't transfer because it is already in payment) doesn't have any impact on these two little DB pensions which aren't yet in payment.

If you have a 'current' Cash Equivalent Transfer Value (CETV) - one which is within its 'guarantee period' - then yes, you can transfer it. Financial advice isn't mandatory where a CETV is below £30K, but there is no guarantee your SIPP provider will accept a transfer from a DB scheme, whatever the value, without confirmation from a regulated adviser that they recommend transferring.

If your current SIPP won't accept it, have a browse and see if another SIPP provider would, or set up a stakeholder pension (Aviva is still open to new retail applications) and they have to accept the transfer. You could then transfer on from that to your preferred SIPP.

Albermarle

As above, you will need to have a search through your SIPP's Terms and Conditions regarding transfers in from a DB scheme. 
Due to problems in the past, transferring out from a DB scheme is a highly regulated transaction and even when it is allowed some pension providers shy away from them.
That is assuming you have been offered a transfer value rather than a cash lump sum. In the latter case I think it would be most likely to be 25% tax free and 75% taxable, which would be added to your current taxable income.

zooks

Thanks all. I don't have a SIPP so I will have to find one that will take multiple DB transfers.

I remember reading somewhere that there are rules to what I can put into a pension after retirement but presumably there are no penalties for moving old pensions?

Babcock have provided a transfer out value and I have applied to Railpen for the same

DRS1

zooks said:

Thanks all. I don't have a SIPP so I will have to find one that will take multiple DB transfers.

I remember reading somewhere that there are rules to what I can put into a pension after retirement but presumably there are no penalties for moving old pensions?

Babcock have provided a transfer out value and I have applied to Railpen for the same

Well usually you need earnings from employment or self employment to be able to contribute to a pension.  If you retire as in stop working completely then your contributions are limited to £3600 gross pa.  If you get to be over 75 then you cannot contribute any more (not even the £3600 gross)  But transfers are not contributions so they are OK (subject to the rules around whether you need advice or not).

DRS1

Just to add those transfer values have a limited shelf life (3 months I believe) and you may have to wait 12 months to get a new one if your current one expires (at least a free one).  You may want to check with your preferred SIPP provider what their line is on small DB transfers.  Or as @Marcon suggested go straight for an Aviva stakeholder plan as an immediate step before transferring on to a SIPP later (once you have completed both DB transfers).

Personally I still think you should look carefully at what you would be giving up. 

Marcon

DRS1 said:

zooks said:

Thanks all. I don't have a SIPP so I will have to find one that will take multiple DB transfers.

I remember reading somewhere that there are rules to what I can put into a pension after retirement but presumably there are no penalties for moving old pensions?

Babcock have provided a transfer out value and I have applied to Railpen for the same

Well usually you need earnings from employment or self employment to be able to contribute to a pension.  If you retire as in stop working completely then your contributions are limited to £3600 gross pa.  If you get to be over 75 then you cannot contribute any more (not even the £3600 gross)  

No. You can contribute if the provider will accept it - you just don't get tax relief on personal contributions once you hit age 75.

Albermarle

zooks said:

Thanks all. I don't have a SIPP so I will have to find one that will take multiple DB transfers.

I remember reading somewhere that there are rules to what I can put into a pension after retirement but presumably there are no penalties for moving old pensions?

Babcock have provided a transfer out value and I have applied to Railpen for the same

To save you time , I can tell you that the Fidelity SIPP does NOT accept DB transfers of any value, without the recommendation of a qualified financial advisor ( which would probably cost nearly as much as the transfer values so not a possibility) 
It looks Like AJ Bell will accept them with a value below £30K , although you would need to double check by calling them.
Most likely they will still recommend that you get financial advice, but that is not the same as insisting that you do. 

cloud_dog

zooks said:

Thanks all. I don't have a SIPP so I will have to find one that will take multiple DB transfers.

I remember reading somewhere that there are rules to what I can put into a pension after retirement but presumably there are no penalties for moving old pensions?

Babcock have provided a transfer out value and I have applied to Railpen for the same

I know Vanguard pension will accept a small (< £30k) DB pension transfer, if that helps.