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Transfer of DC Pension to SIPP

Barbes
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Transfer of DC Pension to SIPP

#395899

Postby Barbes » March 15th, 2021, 7:24 pm

For many years I worked via my limited company and built a pension in a SIPP via employer contributions. Now, thanks largely to IR35, i'm employed on a long term contract with a generous employer's DC contribution as part of the package which also comes with a flexible salary sacrifice option. The catch though is that this must be invested in the employer's scheme - it can't be invested in my SIPP. This means, I assume, that I will need to get 'independent' advice if I want to transfer the DC assets to my SIPP at the end of the contract should the value exceed £30k which is very likely. Two questions:

1) Is my advice assumption correct for DC assets where there are no other scheme benefits and the transfer would be purely to simplify administration?
2) If it is the case that advice would be required, is it possible to transfer the DC assets before they reach the £30k limit whilst remaining a member of the DC scheme, and again at the end of the contract?

I'm new here so apologies if a similar query has been answered before.

Thanks

JohnB
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Re: Transfer of DC Pension to SIPP

#395904

Postby JohnB » March 15th, 2021, 7:51 pm

I don't think you need to get advice on DC moves if its just a pot of investments that can be sold. Most company pension schemes allow partial transfers, so you could just put out a tranche every few years. I used to.

melonfool
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Re: Transfer of DC Pension to SIPP

#395947

Postby melonfool » March 15th, 2021, 10:18 pm

You only need financial advice to move DB schemes (over £30k cash transfer value).

I move these all the time as I do short term contracts and pick up bits of pension all over the place.

Mel

mc2fool
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Re: Transfer of DC Pension to SIPP

#395953

Postby mc2fool » March 15th, 2021, 10:47 pm

melonfool wrote:You only need financial advice to move DB schemes (over £30k cash transfer value).

Or DC schemes over £30K that have any "safeguarded benefits".

https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/transferring-your-pension

melonfool
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Re: Transfer of DC Pension to SIPP

#395955

Postby melonfool » March 15th, 2021, 10:57 pm

mc2fool wrote:
melonfool wrote:You only need financial advice to move DB schemes (over £30k cash transfer value).

Or DC schemes over £30K that have any "safeguarded benefits".

https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/transferring-your-pension


Well, according to the link you posted that only applies if moving to another DC scheme. SIPPs are not mentioned.

"If the value of your safeguarded benefit pension is over £30,000 and you’re transferring to another defined contribution pension, the government requires that you seek regulated financial advice before doing so."

Mel

mc2fool
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Re: Transfer of DC Pension to SIPP

#395960

Postby mc2fool » March 15th, 2021, 11:16 pm

melonfool wrote:
mc2fool wrote:
melonfool wrote:You only need financial advice to move DB schemes (over £30k cash transfer value).

Or DC schemes over £30K that have any "safeguarded benefits".

https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/transferring-your-pension

Well, according to the link you posted that only applies if moving to another DC scheme. SIPPs are not mentioned.

SIPPs are DC schemes.

"Types of defined contribution pension
These include:

Executive pension plan
Group personal pension
Master trust pension (e.g. NEST, NOW pension, the People’s Pension)
SIPP (Self Invested Personal Pension)
SSAS (Small Self Administered Schemes)
Stakeholder pension
"

https://www.pensionwise.gov.uk/en/pension-types#defined-contribution

swill453
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Re: Transfer of DC Pension to SIPP

#395989

Postby swill453 » March 16th, 2021, 8:03 am

Well the OP did say "where there are no other scheme benefits".

Scott.

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Re: Transfer of DC Pension to SIPP

#396112

Postby mc2fool » March 16th, 2021, 12:01 pm

Indeed. I was just answering the general claim that you only need advice for DB schemes.

Barbes
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Re: Transfer of DC Pension to SIPP

#396138

Postby Barbes » March 16th, 2021, 12:57 pm

Thanks for the reassuring replies. There are no other benefits as part of the scheme so it sounds like I'll be fine.

moorfield
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Re: Transfer of DC Pension to SIPP

#396363

Postby moorfield » March 17th, 2021, 9:26 am

JohnB wrote:I don't think you need to get advice on DC moves if its just a pot of investments that can be sold. Most company pension schemes allow partial transfers, so you could just put out a tranche every few years. I used to.


Snap. I've done this a few times too. If you are using the likes of AJ Bell or Hargreaves Lansdown this should be straightforward to do.

swill453
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Re: Transfer of DC Pension to SIPP

#396367

Postby swill453 » March 17th, 2021, 9:34 am

Barbes wrote:1) Is my advice assumption correct for DC assets where there are no other scheme benefits and the transfer would be purely to simplify administration?
2) If it is the case that advice would be required, is it possible to transfer the DC assets before they reach the £30k limit whilst remaining a member of the DC scheme, and again at the end of the contract?

The first question has been answered, and if you wait till the end of the contract there will be no problem transferring the lot to a SIPP.

However a piecemeal transfer might be possible too, to get the money in your SIPP ASAP. Others have said they do this, but it requires the permission/cooperation of the donor scheme, and they may not allow it. Easy to ask though.

Scott.

Barbes
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Re: Transfer of DC Pension to SIPP

#396558

Postby Barbes » March 17th, 2021, 10:24 pm

swill453 wrote:
Barbes wrote:1) Is my advice assumption correct for DC assets where there are no other scheme benefits and the transfer would be purely to simplify administration?
2) If it is the case that advice would be required, is it possible to transfer the DC assets before they reach the £30k limit whilst remaining a member of the DC scheme, and again at the end of the contract?

The first question has been answered, and if you wait till the end of the contract there will be no problem transferring the lot to a SIPP.

However a piecemeal transfer might be possible too, to get the money in your SIPP ASAP. Others have said they do this, but it requires the permission/cooperation of the donor scheme, and they may not allow it. Easy to ask though.

Scott.


Good suggestion - nothing to lose by asking. I had a look at the fund choice today and, although it's not bad and the OCRs aren't as high as I'd expected, on balance I'd rather be in my SIPP investments.


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