Transferring into a SIPP: Rules, Process, and Tax Implications

What does transferring into a SIPP mean?

Transferring into a SIPP means moving your existing pension savings from another pension scheme into a Self Invested Personal Pension, giving you control over investment decisions and potentially access to a wider range of investment assets.

What is a SIPP transfer?

A SIPP transfer is the process of moving pension funds from an existing pension scheme into a SIPP. This could involve transferring workplace pensions from previous employers, old personal pensions, stakeholder pensions, or even Defined Benefit schemes, although DB pension transfers are rarely advisable.

When you transfer into a SIPP, your old pension provider either sells your existing investments and transfers the cash, or moves your investments directly if your new provider supports in-specie transfers.

The transfer itself shouldn't trigger tax charges provided you're moving between registered UK pension schemes, and your pension maintains its tax-efficient status throughout the process.

Why transfer to a SIPP?

There are several reasons why you might choose to transfer existing pensions into a SIPP:

• Greater investment control: SIPPs offer access to thousands of investment options, including individual shares, bonds, investment trusts, ETFs, and in some cases commercial property. If your existing pensions limit you to a small selection of funds, transferring to a SIPP could give you much broader choice.
• Consolidation: If you've accumulated multiple pension pots from different employers over your career, consolidating them into a single SIPP could make your retirement savings easier to manage and monitor. Rather than tracking several different pensions with different providers, you'll have everything in one place.
• Potential cost savings: Some older pensions charge high annual management fees of 1% or more, while modern platform SIPPs often charge between 0.1% and 0.45%. Over time, these cost differences can significantly impact your retirement savings.
• Simplified withdrawal planning: When you reach retirement, having your pensions consolidated in a SIPP could make it easier to plan tax-efficient withdrawals and manage your income strategy.
• Estate planning: SIPPs currently offer favourable inheritance tax treatment, sitting outside your estate for IHT purposes until April 2027. Consolidating pensions into a SIPP can simplify estate planning, although the tax advantages are changing from 2027.

When does transferring make sense?

Transferring to a SIPP makes most sense when you have:

• High fees on existing pensions: If your current pensions charge annual fees above 0.75%, transferring to a lower-cost SIPP could save you thousands of pounds over the long term.
• Old workplace pensions with limited options: If your existing pensions offer only a handful of investment funds and you want broader choice, a SIPP transfer gives you access to thousands of additional investments.
• Multiple small pension pots: If you have several small pensions from different employers, each charging annual fees, consolidation can reduce your overall costs and administrative burden.
• A desire for active investment management: If you have investment experience and want hands-on control of your pension portfolio, a SIPP transfer enables this level of involvement.

However, transferring into a SIPP isn’t always the best strategy. You shouldn't transfer if your existing pension includes valuable guarantees like protected annuity rates, if you'd face substantial exit penalties, or if you lack the confidence to manage investments yourself.

What types of pensions can you transfer into a SIPP?

Most UK pension schemes can be transferred into a SIPP, although the process, timescales, and advisability vary considerably depending on the type of pension.

Defined Contribution (DC) pensions

Defined Contribution pensions are the most common type transferred into SIPPs and generally transfer smoothly without complications.

DC pensions include workplace pensions where you and your employer make contributions that are invested, with your retirement income depending on contribution levels and investment performance. These include auto-enrolment workplace pensions, personal pensions, group personal pensions, and older money purchase schemes.

Transferring DC pensions into SIPPs is usually straightforward because both schemes work on the same principles. Your pension value is calculated, investments are either sold or transferred directly, and the funds move to your new SIPP within a few weeks.

Defined Benefit (DB) pensions

Defined Benefit pensions provide guaranteed income in retirement based on your salary and service length, and transferring them is rarely in your best interests.

DB schemes promise specific income for life, protected against inflation and continuing for your spouse if you die first. These guarantees are extremely valuable and can't be replicated once you transfer out, which means a transfer from a DB pension to a SIPP is rarely a good decision.

Legal requirements for DB transfers: If your DB pension is valued at more than £30,000 and you’re considering transferring to a DC scheme, you're legally required to take advice from an FCA-authorised financial adviser before transferring. This requirement exists because DB transfers are almost always unsuitable, with people giving up guaranteed income worth significantly more than the transfer value offered.

The Financial Conduct Authority provides guidance on Defined Benefit pension transfers to help consumers understand the risks involved.

Stakeholder or personal pensions

Stakeholder pensions and personal pensions usually transfer smoothly into SIPPs with few complications.

These pension types were designed for portability, so transfers are straightforward. Stakeholder pensions have capped charges (maximum 1% annually after the first year) and low or no exit penalties, making them particularly easy to transfer.

Most personal pensions also transfer without problems, although some older ones might include exit penalties or market value adjustments that reduce your transfer value.

You should always request a transfer value statement before proceeding to check for these charges.

Old workplace pensions from past employers

If you've changed jobs several times during your career, you might have multiple old workplace pensions that you've lost track of or aren't actively managing.

The government's Pension Tracing Service can help you locate old pensions using previous employer names. You can also read our guide on how to find your pensions for more information.

Once you've located old pensions, contact each provider to request:

• Current pension value
• Type of pension (DC or DB)
• Transfer value if different from current value
• Any exit penalties or charges
• Investment options currently held
• Annual fees and charges

This information will help you decide whether transferring each pension into a SIPP would be beneficial.

What is the process for transferring a pension into a SIPP?

With most providers the process for transferring your pension into a SIPP should be relatively smooth and straightforward.

Step-by-step overview

1. Gather details of existing pensions - Contact your old providers to request transfer values, exit fees, and guarantee information.
2. Choose your SIPP provider - Compare providers based on fees, investment range, and transfer capabilities, and then complete the application to open a SIPP.
3. Decide on transfer method - Choose between cash transfer or in-specie transfer depending on your circumstances and provider capabilities.
4. Complete transfer forms - Your new SIPP provider handles most administration, contacting your old provider on your behalf. Your old provider will then verify the transfer, calculate the transfer value, and transfer the funds.
5. Verify - Check that the correct amount has been transferred and all investments are as expected.

The entire process from initiation to completion usually takes 4 to 8 weeks for straightforward DC transfers, although complex transfers can sometimes take slightly longer.

Step 1: Gather details of existing pensions

Before starting a transfer, collect comprehensive information about each pension you're considering transferring.

Key information to request:

• Provider details: Company name, contact information, policy or scheme reference number, and membership number.
• Valuation: Current cash equivalent transfer value (CETV), which might differ from the accumulated fund value shown on statements if exit penalties apply.
• Pension type: Defined Contribution or Defined Benefit, as this affects the transfer process and whether advice is legally required.
• Exit fees: Charges for leaving the scheme, market value adjustments, or early exit penalties that could reduce your transfer value.
• Guarantees: Protected annuity rates, guaranteed minimum pensions, or other valuable features you'd lose by transferring.
• Investment holdings: Details of current funds or investments, which is particularly important if you're considering an in-specie transfer.
• Crystallisation status: Whether you've started taking benefits from the pension, as crystallised funds transfer differently from uncrystallised funds.

Request this information in writing or via email so you have a clear record of all charges and features before making your decision.

Step 2: Choose your SIPP provider

When you’re comparing SIPPs you’re going to want to consider:

• FCA authorisation: Never transfer to a provider that isn't authorised by the Financial Conduct Authority. You can verify their authorisation on the FCA Register.
• Transfer capabilities: Double check that the provider accepts the type of pension you're transferring, supports in-specie transfers if needed, and has experience handling transfers from your old provider.
• Cost structure: Compare total costs including platform charges, dealing fees, transfer charges (some providers charge for accepting transfers), and ongoing management fees.
• Investment range: Ensure the provider offers the investments you want to hold, whether that's a wide range of funds and shares or specialist options like commercial property.
• Online management: Review the provider's platform for ease of use, mobile app functionality, and quality of investment research tools.

For guidance on setting up your new SIPP, see our guide to Opening a SIPP.

Step 3: Decide on cash vs in-specie transfer

You'll need to choose between two transfer methods, each with distinct advantages and timing implications.

Cash transfers:

Your old provider sells all investments, transfers the cash proceeds to your new SIPP, and you then reinvest according to your strategy. This is the most common transfer method and is supported by all SIPP providers.

• Advantages: Straightforward process, faster completion, opportunity to restructure your portfolio completely, works with all providers.
• Disadvantages: You're out of the market during the transfer period (usually 4 to 8 weeks), which could affect your overall returns if markets move significantly. You may also incur dealing charges to repurchase investments in your new SIPP.

In-specie transfers:

Your investments move directly from your old pension to your new SIPP without being sold, keeping you invested throughout the transfer period.

• Advantages: You remain invested during the transfer, won’t need to repurchase investments in the new SIPP, and won’t incur dealing charges.
• Disadvantages: There’s a longer transfer time (often 8 to 12 weeks), fewer providers support this option, providers often charge a fee, and it only works if your new provider can hold the same investments as your old pension.

For most straightforward pension transfers, cash transfers could be simpler and faster.

Step 4: Initiate transfer and sign forms

Once you've chosen your SIPP provider and transfer method, you'll need to complete the paperwork to authorise the transfer.

The authorisation process:

Your new SIPP provider will send you transfer forms (either electronic or paper) requesting information about your old pension including provider details, policy numbers, and transfer value. You'll sign these forms authorising your new provider to request the transfer on your behalf.

Most providers now offer electronic signatures and digital document submission, speeding up this stage considerably.

Your new SIPP provider then contacts your old provider with your signed authorisation, requesting the pension transfer. Under FCA rules, your old provider should process straightforward DC pension transfers within 6 to 10 weeks from receiving the complete and correct transfer request.

What happens during processing:

• Your old provider acknowledges the transfer request
• They calculate the exact transfer value as of the transfer date
• They prepare the paperwork and either sell investments or arrange in-specie transfer
• They transfer the funds to your new SIPP provider
• Your new provider confirms receipt and credits your SIPP.

You should receive updates from both providers throughout this process, although communication quality varies between providers.

Step 5: Monitor progress and confirm completion

Once the transfer is initiated, it’s important to monitor the progress. Contact your old provider after two weeks if you haven't received acknowledgement of the transfer request. Check with your new SIPP provider every few weeks for updates on expected completion dates.

When the transfer completes, verify several key details:

• That the transferred amount matches the transfer value quoted by your old provider
• That all investments transferred correctly if you did an in-specie transfer
• That no unexpected charges were applied.

If you had a cash transfer, you'll need to reinvest the proceeds according to your investment strategy. Your new SIPP will hold the transfer value in cash until you make investment decisions.

How long does a pension transfer take?

Transfer times vary quite a bit depending on the type of pension, the transfer method, and the efficiency of the providers involved.

Average timescales

• Standard DC to SIPP transfers (cash): 4 to 8 weeks from completing paperwork to funds arriving in your new SIPP. This includes time for your old provider to acknowledge the request, process the transfer, sell investments, and send funds.
• In-specie transfers: 8 to 12 weeks due to the additional complexity of transferring investments directly rather than selling them first.
• DB pension transfers: 12 to 26 weeks or more, because these require financial advice, extensive paperwork, and multiple valuations. The complexity of DB schemes means transfers take significantly longer than DC transfers, and as we’ve already reiterated they’re usually not the best approach to retirement planning.
• Small pension pots: Sometimes faster than average timescales, particularly stakeholder pensions or small DC pots where the administration is more straightforward.

What can delay the process?

Several factors can extend transfer timescales beyond the averages:

• Exit fee disputes: If your old provider applies exit fees you weren't aware of or that seem excessive, disputing these charges can add weeks to the process.
• Incorrect or incomplete paperwork: Missing information, incorrect policy numbers, or unsigned forms mean your old provider will reject the transfer request, sending it back for correction and restarting the clock.
• Old provider inefficiency: Some providers may slower at processing transfers. If this happens, complaints to the provider and the Financial Ombudsman can help.
• Illiquid or unlisted assets: If your old pension holds illiquid investments like commercial property or unlisted securities, selling these before transfer can take considerable time.
• Guaranteed Minimum Pension (GMP) reconciliation: Some older pensions include GMP elements that require reconciliation with HMRC records before transfer, adding weeks to the process.
• Death benefit nominations: Some providers won't complete transfers until death benefit nominations are confirmed, particularly for large transfers.

If your transfer exceeds 10 weeks without clear justification, you can contact your old provider for an explanation and consider raising a formal complaint if you're not satisfied with their response.

What are the benefits of transferring to a SIPP?

Transferring into a SIPP can offer a range of different benefits:

Consolidation and simplicity

Managing multiple pension pots from different employers can become increasingly complicated as your career progresses, with each pension requiring separate monitoring, different login details to remember, and individual statements to track.

Consolidating pensions into a single SIPP means:

• One platform to log into instead of several
• Single annual statement showing your total pension wealth
• Simplified investment management with one portfolio to monitor
• Easier withdrawal planning when you reach retirement
• Reduced risk of losing track of small pension pots

Investment flexibility

SIPPs offer significantly broader investment choice than most workplace or personal pensions, giving you access to thousands of funds, individual shares, bonds, ETFs, and in some cases commercial property.

If your existing pensions limit you to 10 or 20 pre-selected funds, transferring to a SIPP opens up investment opportunities including:

• Individual company shares on UK and international exchanges
• Thousands of investment funds covering every asset class and geographic region
• Exchange traded funds (ETFs) for low-cost index tracking
• Investment trusts offering access to specialist strategies
• Corporate and government bonds for income and diversification
• Commercial property for diversification (with some types of full SIPPs)

This flexibility can prove particularly beneficial to experienced investors who want to construct specific portfolios aligned with their investment philosophy.

Potential cost efficiency

Some older pensions charge annual management fees of 1% or more, plus additional charges for fund management and administration.

By contrast, modern SIPPs often charge annual platform fees of 0.1% to 0.45%, some with capped fees on larger pots.

Tax planning benefits

Consolidating pensions in a SIPP can simplify tax planning in several ways:

• Withdrawal planning: Having all your pensions in one place makes it easier to plan tax-efficient withdrawals, taking the right amounts to use your Personal Allowance fully without pushing into higher tax bands unnecessarily.
• Allowance management: Tracking contributions to avoid exceeding the Annual Allowance is simpler when most of your pension wealth is consolidated in one SIPP.
• Estate planning: While pensions currently sit outside your estate for inheritance tax purposes (changing from April 2027), consolidating them in a SIPP can simplify estate planning and beneficiary nominations. Rather than updating nominations with multiple providers, you maintain one expression of wish form.  However, post the inheritance tax changes for pensions from April 2027, having all of your pensions in one place would also make it much easier for a personal representative to manage any inheritance tax liability.

For more information about pension tax planning, see our guide on pension tax.

What are the risks of transferring to a SIPP?

While transferring can offer benefits, it's crucial to understand that there can be risks too.

Loss of guarantees (DB pensions)

Defined Benefit pensions provide valuable guarantees that disappear permanently once you transfer to a SIPP.

A transfer from a DB pension to a SIPP would mean you’d lose:

• Guaranteed income for life regardless of investment performance or life expectancy
• Inflation protection through index-linked increases
• Spouse's pension continuing at 50% or more if you die first

That’s why transferring DB pensions is unsuitable for the vast majority of people, and transfers over £30,000 legally require FCA-regulated financial advice.

For more information on this, take a look at our guide that explains the differences between these pension types.

Possible exit fees or transfer penalties

Many pensions, particularly older ones, include charges for transferring out:

• Exit fees: Fixed charges or percentage-based charges for closing your pension and transferring elsewhere.
• Early exit penalties: In addition to regular exit fees, some pension contracts include additional penalties if you transfer within the first 5 or 10 years, sometimes calculated as a percentage of your fund value.
• Market value adjustments (MVAs): Reductions applied when you transfer from with-profits funds or guaranteed funds during certain market conditions. MVAs can reduce your transfer value by 10% or more if markets have fallen since you invested.

Always request a detailed breakdown of all charges before committing to a transfer. If exit fees would cost more than you'd save from lower ongoing charges in your SIPP, the transfer might not be a good plan.

Market risk - investments can fall in value

When you transfer from a workplace pension with a default fund managed by professionals to a SIPP where you make all the investment decisions, you take on full responsibility for investment outcomes.

This can expose you to a broader range of investment risks than you might experience in a managed workplace pension, including:

• Concentration risk if you don't diversify properly
• Timing risk if you buy or sell at inappropriate moments
• Asset allocation risk if you choose investments unsuitable for your age or risk tolerance
• Overtrading risk if frequent trading erodes your pension through charges.

While these risks are manageable with proper investment knowledge and discipline, transferring to a SIPP might not be the best plan if you lack confidence in your investment capabilities. In those circumstances, the professional management provided by workplace pension default funds might deliver better outcomes even with higher fees.

Scams and unauthorised advisers

Pension scams have become increasingly sophisticated, with criminals targeting people considering transfers.

Warning signs of pension scams:

• Unsolicited contact about your pension (illegal since 2019)
• "Free pension reviews" from companies you didn't approach
• Pressure to transfer quickly or urgently
• Promises of guaranteed high returns (8% to 10% or more)
• Offers to access your pension before age 55
• Suggestions to transfer to overseas schemes
• Requests to transfer to invest in exotic assets like overseas property, storage units, or renewable energy bonds.

The FCA provides comprehensive guidance on avoiding pension scams and maintains a warning list of unauthorised firms and known scams.

How does tax work when transferring to a SIPP?

Understanding the tax implications of pension transfers helps you avoid unexpected charges and plan transfers tax-efficiently.

Are pension transfers taxable?

Transfers between registered UK pension schemes aren't taxable events and don't trigger income tax or capital gains tax charges.

When you transfer from one UK pension to another, including transfers into SIPPs:

• No income tax is charged on the transfer value
• The transferred funds maintain their tax-efficient status
• Tax relief you've already received isn't clawed back
• You don't need to report the transfer on your tax return
• The transfer doesn't count as a pension contribution, so it doesn't affect your Annual Allowance.

This tax neutrality applies whether you transfer £10,000 or £1 million. The transfer is simply moving your existing pension savings from one tax-efficient wrapper to another.

What if transferring overseas (QROPS)?

Transferring UK pensions to Qualifying Recognised Overseas Pension Schemes (QROPS) can sometimes trigger tax charges, and in some cases those charges can be substantial.

The Overseas Transfer Charge: If you transfer your pension to a QROPS and you're not resident in the same country as the scheme, then HMRC will charge 25% of the transfer value as an Overseas Transfer Charge. This charge applies immediately on transfer, significantly reducing your pension wealth.

Exemptions from this charge:

• You're resident in the same country as the QROPS
• Your employer is sponsoring your relocation and the QROPS is an occupational pension scheme.

Even when exempt from the Overseas Transfer Charge, QROPS transfers create additional complexity around reporting requirements, currency risk, and potential loss of UK pension protections.

For most people remaining in the UK, transferring to a QROPS makes no sense. Even for expatriates, keeping UK pensions in UK schemes often proves simpler and more cost-effective than transferring overseas.

What about Annual Allowance implications?

The transfer itself doesn't affect your Annual Allowance because it's not counted as a new pension contribution. However, actions you take after transferring could trigger allowance restrictions.

• Transfers don't use allowance: Moving £100,000 from an old workplace pension to a SIPP doesn't consume any of your £60,000 Annual Allowance. The transfer is simply moving existing pension savings, not creating new pension contributions.
• But accessing benefits triggers MPAA: If you start taking flexible income from your SIPP after transferring, you'll trigger the Money Purchase Annual Allowance, reducing your future contribution capacity to just £10,000 annually.
• Planning around the MPAA: If you're still working and making substantial pension contributions, consider carefully before accessing benefits from your newly transferred SIPP. Taking even small amounts of taxable income triggers the MPAA permanently, reducing your ability to continue building pension wealth.

For more information about contribution limits, read our guide on pension contributions.

Can you continue contributing after the transfer?

Yes, you can continue making contributions to your SIPP after transferring other pensions into it, subject to the normal Annual Allowance and earnings limits.

Transferring doesn't restrict your ability to make new contributions unless you've already triggered the Money Purchase Annual Allowance by accessing benefits from another pension. In that case, your contribution limit is £10,000 across all your pensions.

The ability to consolidate old pensions and continue contributing to the same SIPP is one of the advantages of this approach, giving you a single pension pot to manage throughout your working life.

How to check if transferring is right for you

Not every pension should be transferred to a SIPP, so it’s important to be able to weigh up when this might be the right approach and when it’s unlikely to be a good idea.

Should I transfer my pension to a SIPP?

Consider transferring if:

• You want investment control: You have investment knowledge and confidence to manage your pension actively, and you're frustrated by the limited options in your current pension.
• Consolidation appeals to you: You'd rather manage one pension pot than several scattered across different providers with different investment strategies.
• You have multiple small pots: You've accumulated several workplace pensions from different employers, each charging fees, and consolidation would simplify management and potentially reduce costs.
• Your current fees are high: If your existing pensions charge annual fees above 0.75%, then transferring to a lower-cost SIPP could generate meaningful long-term savings.
• You're approaching retirement: You want flexible drawdown options and active management of your withdrawal strategy rather than being limited by your current pension's options.

Don't transfer if:

• You have valuable guarantees: Your pension includes protected annuity rates, guaranteed minimum pension, or defined benefits that are worth more than the transfer value.
• Exit penalties are high: The costs of transferring would outweigh the benefits from lower fees or better investment options.
• You lack investment confidence: You're uncomfortable making investment decisions and would prefer professional management through workplace pension default funds.

When must you take financial advice?

Financial advice is legally required in one specific circumstance: if you're transferring a Defined Benefit pension valued at more than £30,000, you must take advice from an FCA-authorised financial adviser specialising in pension transfers.

This legal requirement exists because DB pension transfers are rarely a good idea. The adviser must assess whether transferring would be in your best interests, considering your circumstances, objectives, and the value of the guarantees you'd lose.

But even though it isn’t a legal requirement, it’s also a good idea to seek financial advice before a transfer if:

• You're transferring big DC pensions (£100,000 or more)
• You're uncertain about investment decisions
• You lack experience managing pensions actively
• Your existing pension includes any guarantees or protected benefits.

While advice obviously costs money, it can prevent costly mistakes that might far exceed the advice fee.

How to find a regulated adviser

You should only work with advisers authorised by the Financial Conduct Authority to ensure you have regulatory protections if things go wrong.

Finding an FCA-authorised adviser:

Check the FCA Register to verify any adviser is properly authorised and search for advisers in your area or specialising in pension transfers.

Look for advisers with relevant qualifications and experience, and request information about their fees upfront, including whether the adviser charges fixed fees, percentage-based fees, or hourly rates.

Questions to ask potential advisers:

• Are you FCA authorised and for what activities?
• What qualifications and experience do you have with pension transfers?
• How much will your advice cost?
• Will you provide written recommendations explaining your advice?
• Are you covered by professional indemnity insurance?
• What happens if I'm unhappy with your advice?

Never work with "advisers" who contact you unsolicited, promise guaranteed outcomes, or pressure you to decide quickly without proper analysis of your circumstances.

Checklist before transferring

Work through this checklist before committing to a pension transfer:

How to compare SIPP providers for transfers

Choosing the right SIPP provider for your transfer requires you to weigh up multiple factors beyond just headline costs.

Key factors to assess

• Platform charges: Compare annual fees, including whether they're percentage-based, fixed amounts, or capped at maximum values. Calculate your expected annual cost based on your transfer value.
• Dealing charges: Check fees for buying and selling investments. If you plan to trade actively, these charges can add up quickly and might offset lower platform fees.
• Investment range: Ensure the provider offers the specific investments you want to hold. If you're transferring to access broader investment choice, verify the provider actually offers those additional options.
• Transfer support: Some providers offer dedicated transfer teams that handle the administration, while others provide less support. Read reviews about transfer experiences with each provider.
• In-specie capabilities: If you want to transfer investments without selling them, check whether the provider supports in-specie transfers, which assets they can accept and if they will charge an additional fee.
• Online platform quality: It’s a good idea to test the provider's website and mobile app if you can. A well-designed platform makes managing your SIPP easier, while clunky interfaces can be frustrating.
• Customer service: Read independent reviews about customer service quality and responsiveness. When you need help with transfers or investment queries, good support matters.
• FSCS protection: Confirm the provider is covered by the Financial Services Compensation Scheme, protecting your pension if the provider fails. All FCA-authorised providers should have this protection.
• Additional services: Some providers offer features like automatic rebalancing, financial planning tools, research reports, or model portfolios that might add value depending on your needs.

Best providers for pension transfers

While we can't provide specific product recommendations, we can give you an overview of the types you might want to consider.

Types of providers to consider:

• Established investment platforms: Large, well-known platforms with extensive track records, comprehensive investment ranges, and competitive fees. These providers handle thousands of transfers annually and have streamlined processes.
• Specialist SIPP providers: Firms focusing specifically on SIPPs rather than offering them alongside other products. These providers often have particular expertise in pension transfers and complex situations.
• Discount brokers: Low-cost providers offering basic SIPP services with minimal frills but very competitive pricing. These suit experienced investors who don't need extensive support or research tools.
• Full-service providers: Firms offering comprehensive services including financial advice, managed portfolios, and premium support alongside SIPP administration. These cost more but provide more hand-holding.

What to avoid

Several red flags should make you think twice about a SIPP provider:

• Unregulated firms: Never, ever transfer your pension to a provider that isn't FCA authorised. Always verify authorisation on the FCA Register before proceeding.
• "Free pension review" schemes: Unsolicited offers of free pension reviews are often scams designed to convince you to transfer to unsuitable investments where the "adviser" receives large commissions.
• Providers encouraging high-risk investments: Be wary of providers who push you towards unusual investments like overseas property, storage units, renewable energy bonds, or other exotic assets. These investments are often illiquid, overvalued, and sometimes complete scams.
• Excessive fees: Some providers charge setup fees of £1,000 or more, high annual charges above 1%, or dealing fees exceeding £15 per trade. These excessive costs erode your pension unnecessarily.
• Poor regulatory track record: Check whether the provider has regulatory warnings, fines, or disciplinary action from the FCA. The FCA Warning List identifies firms to avoid.
• Pressure tactics: Legitimate providers don't pressure you to transfer quickly, promise guaranteed returns, or use aggressive sales tactics. These behaviours indicate potential problems.

If a provider exhibits any of these warning signs, look elsewhere regardless of how attractive their headline fees might appear.

Frequently Asked Questions

Can I transfer more than one pension into a SIPP?

Yes, you can transfer multiple pensions into a single SIPP, and this is one of the main advantages of consolidation.

There's no legal limit on the number of pensions you can transfer or the total value you can consolidate. Many people transfer three, four, or even more old workplace pensions into one SIPP for simpler management.

However, each transfer needs to be assessed individually to ensure it's worthwhile, as some old pensions might have valuable features worth keeping while others might charge exit penalties.

Can I transfer a small pension pot?

Yes, small pension pots can be transferred into SIPPs, although you should consider whether the transfer makes financial sense. If exit fees would consume a significant percentage of a small pot, or if the SIPP provider charges minimum fees that would be expensive relative to your pot size, then transferring might not be worthwhile.

The small pots rule allows you to take pensions worth £10,000 or less as lump sums (25% tax-free, 75% taxable) without triggering the MPAA, provided the pension is from a different provider.   

Can I transfer a pension I've already started taking?

Yes, you can transfer crystallised funds (pensions you've already started accessing) to a SIPP, although the process is slightly more complicated than transferring uncrystallised funds.

Your crystallised funds maintain their crystallised status in the new SIPP, and you can continue taking income from them after the transfer. However, not all SIPP providers accept crystallised fund transfers, so you'll need to check this with your chosen provider.

If you've triggered the Money Purchase Annual Allowance by taking flexible benefits, this restriction applies to your new SIPP, limiting future contributions to £10,000 annually.

Do I lose my tax relief when transferring?

No, you don't lose tax relief when transferring between UK registered pension schemes.

The tax relief you've already received on contributions remains in your pension, and transferring doesn't trigger any clawback of that relief. The transferred funds maintain their tax-efficient status in your new SIPP, continuing to grow free of income tax and capital gains tax.

However, the transfer itself isn't a new contribution, so you don't receive additional tax relief on the transfer value. Tax relief only applies to new contributions you make after the transfer completes.

Is there a limit to how many times I can transfer?

No, there's no legal limit on the number of times you can transfer pensions. You could theoretically transfer your SIPP to another provider every year if you wanted to, although doing so wouldn't make much sense given the time, disruption, and potential costs involved.

What happens if I die before the transfer completes?

If you die before a pension transfer completes, the transfer will be cancelled and your death benefits will be paid from your original pension scheme according to that scheme's rules and your nominations with that provider. This is why it's important to keep death benefit nominations updated with your current pension provider even when you're planning to transfer.

Once you've initiated a transfer, inform your new SIPP provider about your beneficiary wishes as well, so there's no confusion if something happens during the transfer period. After the transfer completes, benefits would be paid from your new SIPP according to your expression of wish form with that provider.

How do I know my transfer has gone through safely?

You'll receive written confirmation from both your old provider and your new SIPP provider when the transfer completes. Your new provider will send a statement showing the transferred amount credited to your SIPP, while your old provider will send confirmation that your pension with them has closed.

Check that the transferred value matches the transfer value quoted before you initiated the transfer, and verify that any in-specie investments transferred correctly.

If you don't receive confirmation within the expected timeframe, contact both providers to check progress. Keep all transfer documentation including initial transfer value statements, completion confirmations, and investment details for your records.