Should I transfer or combine my pensions?

A pension transfer is where you move the money in your existing pension to a different scheme or provider, often so you can get a better deal. 

Your old provider will stop managing your pension, which means you might have to give up certain features or benefits that only they offer.

Pension consolidation is where you bring multiple pensions together by transferring them into one provider or scheme. 

You can choose which pensions you want to combine and which you’d like to keep separate – you do not have to consolidate them all. 

How to transfer your pension and whether it’s a good idea often depends on the type of pension you’re transferring from and to. 

You can use our tool to find out your pension types or ask your pension providers.

You can usually transfer or consolidate your pensions at any point, unless the scheme rules list restrictions.

For example, some defined benefit schemes might not allow transfers out: 

• after your pension has started paying out 
• within a year of you reaching your normal retirement age (when your provider expects you to start taking an income)
• if you have an ‘unfunded’ public sector scheme, like the NHS or Teachers’ Pension Schemes.   

Some schemes might also only accept transfers in during the first year of you joining – or not accept transfers in at all. Your pension providers will be able to explain the rules that apply to you.

You might want to transfer one or more of your pensions to a new scheme to make it easier to manage or keep track of your pensions. 

For example, if you’ve changed jobs, you might want to move the money in your old employer’s pension to the scheme at your new employer.  

This might mean you only have one provider to deal with, including when you’re ready to start taking an income. 

If you have a defined contribution pension, transferring it to a different scheme might also: 

• save you money if the other scheme has lower fees 
• give you access to different investment options – if you want to choose how your pension is invested 
• give you more options to take money from your pension.  

For example, pension charges have been reducing over time, so new schemes might have lower charges than old schemes. Even a slightly lower fee can make a big difference to your pension’s value, especially if your pension will remain invested for many years.

If you’d like to take your pension income as multiple lump sums but your current provider does not allow this, you could transfer to a scheme that does.

A pension transfer usually cannot be undone, so always make sure you’ll be better off before committing. Never rush into a decision.   

If the scheme you’re considering transferring to does not offer the same features as your existing pension, you’d lose them by moving your pension.  

Here’s what to check for, based on the type of pension you have. 

Always check if your existing pension schemes have any special features or guarantees – and if there are exit fees or other penalties for leaving. You can ask your providers if you’re not sure. 

For example: 

• your money might be invested in funds that pay an extra payment after a certain date (like a ‘with-profits’ fund), typically called a terminal bonus 
• your pension policy might let you convert your pension into a higher guaranteed income than you can get elsewhere, with guaranteed annuity rates. 

You might also need to wait longer to access your pension if your current scheme:  

• has a protected normal minimum pension age (NMPA) under age 55  
• will still let you access your pension from age 55 after 6 April 2028, when the NMPA increases to age 57.  

Most people are better off keeping a defined benefit pension, according to the Financial Conduct Authority (FCA) and the Pensions Regulator (TPR).

If you transfer a defined benefit pension into a defined contribution scheme, you’ll lose the promise of a guaranteed retirement income for life with automatic annual increases.

Instead, your income will be based on: 

• how well the investments perform 
• the charges you’ll start to pay. 

This means the value of your pension could rise or fall before you take the money. It’s also up to you to make sure it lasts for your full retirement as there are no guarantees. 

If your employer has offered you an incentive to transfer your defined benefit pension out – like a cash payment or boosted transfer value – the effect of Income Tax and National Insurance might not make up for the guaranteed income you’ll lose.

You might still want to transfer your defined benefit pension if you’d like to: 

• consolidate it with your other defined benefit pensions 
• take your pension money in a different way than a regular and fixed income for life 
• change how your pension is inherited. 

For example, you can usually choose to take money from a defined contribution pension all in one go, in multiple lump sums or by converting some into a regular income for life or a fixed term.

This might help you access more of your money if you have a short life expectancy, as a regular income for life could pay less overall. 

Most defined benefit schemes will continue to pay a portion of your pension income to any of your dependents after you die, usually stopping when your partner dies and any children reach a certain age – often 18 or 23 if still in education.  

But money left in a defined contribution pension can be left to anyone you nominate, so this option might mean more of your money can be inherited – depending on the value of your remaining pension.  

If your defined benefit pension is worth over £30,000, you’ll need to pay for financial advice before you can transfer it into a defined contribution pension. This can often cost thousands of pounds.  

If your employer has offered you a financial incentive to transfer, your employer should pay for this advice.

A regulated financial adviser can:  

• tell you if you’d be better off transferring your pension to a different scheme  
• recommend schemes or products to transfer to   
• help identify if the new scheme is likely to be a scam.  

If you pay for regulated financial advice and it turns out to be poor, including if you lose money as a result of bad advice, you can complain and ask for compensation.

To transfer your pension, you usually need to: 

• check your current scheme allows transfers out 
• make sure you won’t lose any benefits leaving your existing pension scheme 
• decide which scheme to transfer into – make sure it’s a better deal and allows transfers in 
• check if you need to pay for financial advice 
• ask your current pension provider for a transfer value and the information they need for a transfer 
• ask the new scheme to start the transfer. 

The two schemes will then arrange to transfer the money between them. A transfer often takes between two and six weeks, but your provider has up to six months to action your request. 

For full step-by-step help, see our guides: 

• How to transfer or combine defined contribution pensions 
• How to combine your defined benefit pensions 
• How to transfer out of a defined benefit pension.

If you’re considering an international pension transfer, see our guides: 

• How to move your UK pension overseas 
• How to transfer your overseas pension to the UK

Do not transfer your money to a new pension provider or invest any money because of a cold call, visit, email or text – it’s likely a scam. You could lose your money and face a large tax bill. 

For more information, see our guide How to spot a pension scam.