Another SIPP Query

[tractorian]

My son has two pensions. The first is an old Contracted Out pension while the other is, what I would call a "normal" pension with an insurance company. My question is, can they be consolidated into a SIPP, or does the Contracted Out plan have to be kept separate?

[Alaric]

My question is, can they be consolidated into a SIPP, or does the Contracted Out plan have to be kept separate?

If it's really "old", the Contracted Out plan would be defined benefit. He may find difficulty and expense in getting it transferred as advisers are reluctant to recommend giving up the guarantees that come with defined benefits. Otherwise I think everything can now be consolidated.

[Kohota]

Generally, any kind of Defined Contribution (money purchase) plan can be transferred into a SIPP, unless there are protected benefits associated with it such as protected tax-free cash (PTFC) or guaranteed annuity rates (GARs).

To add to Alaric's point on DB (final salary) schemes, they can be transferred freely if less than £30,000, and if the receiving SIPP will accept it. Anything over this and it's mandatory for the transfer to be 'advised' by a professional.

Who's the SIPP held with?

[tractorian]

Many thanks for your replies, which have confirmed my own suspicions/understandings.
There is no SIPP as yet and neither of the schemes are with/from employers, both being with Scottish Widows.

[Rhomboid1]

I've an old DB scheme that is over the 30k limit, I've got the transfer value but the hoops to transfer to my Sipp seem cumbersome, does anyone have a link for what the legal rules are because I'm not sure asking my Sipp provider to indemnify my old employer scheme makes much sense

[parallellines]

Not sure it will help you much, as the legal requirement has been clearly explained already in the thread ,but...

http://www.legislation.gov.uk/ukpga/201 ... 48/enacted

It's not to indemnify your old employer DB scheme, the scheme already benefits from a statutory discharge of liability from you when you transfer out, so there's nothing that needs to be indemnified. But the trustees of the old scheme must ensure the advice "box" is ticked before they make a transfer. And the flexibility of the SIPP vs the old scheme generally comes at a price, so it may be a good idea to understand what that price is.