Transfer your Pension

  • Home
  • Transfer your Pension

What is a pension transfer?

A pension transfer in Ireland involves the movement of accumulated pension funds from one pension scheme to another. This process allows individuals to consolidate their pension assets, potentially accessing a more favourable scheme or transitioning to a different pension provider. Common reasons for opting for a pension transfer include seeking better investment opportunities, improved fund management, or changing employment with a move to a new employer’s pension scheme. It’s essential to carefully consider the implications of a pension transfer, as certain schemes may offer specific benefits or tax advantages. Professional advice is often recommended to navigate the complexities of pension transfers, ensuring that the decision aligns with the individual’s overall financial goals and retirement strategy.

What are the most common reasons for a pension transfer? 

Better benefits than your current Provider

These benefits often include annual returns, risk exposure, investment strategies or management rates.

Consolidated management and control

It makes sense to consolidate all your funds into a single diversified high-growth fund. This way communication and control of your investments is greatly improved.

Tax-free lump sum

That you may be able to access up to 25% of your pension tax free at age 50, instead of waiting until retirement. 

What type of pension can be transferred? 

The decision to transfer your pension involves evaluating various factors based on your individual circumstances. Defined Contribution pensions, where both you and your employer contribute, can typically be moved at any time to another contributory pension, Personal Retirement Savings Account (PRSA), or Personal Pension Plan (PPP). Defined Benefit pensions, offering a fixed retirement amount, are more complex to transfer due to potential loss of accumulated benefits, requiring careful consideration and independent financial advice. Some companies provide enhanced transfer values for Defined Benefit pensions, but understanding the associated pros and cons is crucial before deciding. Transferring to a PRSA offers flexibility, especially for those transitioning from employment to self-employment, allowing adaptable contributions and accommodating income fluctuations. Alternatively, starting a Personal Pension or PPP suits newly self-employed individuals, permitting both personal and company contributions with associated tax relief based on the marginal rate. Assessing your risk tolerance and financial goals is essential for optimising your pension transfer decisions.

Complete a brief online FREE assessment tailored to your needs, and allow one of our award-winning advisors to guide you towards the best solution for your needs.

Why do I need to consider before moving my pension?

The decision to transfer your pension involves evaluating various factors based on your circumstances. Defined Contribution pensions, where both you and your employer contribute, can typically be moved at any time to another contributory pension, Personal Retirement Savings Account (PRSA), or Personal Pension Plan (PPP). Defined Benefit pensions, offering a fixed retirement amount, are more complex to transfer due to the potential loss of accumulated benefits, requiring careful consideration and independent financial advice.

Some companies provide enhanced transfer values for Defined Benefit pensions, but understanding the associated pros and cons is crucial before deciding. Transferring to a PRSA offers flexibility, especially for those transitioning from employment to self-employment, allowing adaptable contributions and accommodating income fluctuations. Alternatively, starting a Personal Pension or PPP suits newly self-employed individuals, permitting both personal and company contributions with associated tax relief based on the marginal rate. Assessing your risk tolerance and financial goals is essential for optimizing your pension transfer decisions.

How does the pension transfer works

The process of moving your pension will involve a great deal of administrative work. Let us help you with that, ensuring you know every step of the way.​

Value Amount Report

Start by obtaining your transfer value Report that will outline your transfer value (accumulated amount), accrued benefits, potential transfer costs (exit fees and other charges), and all the necessary information for the transfer process from your new pension provider.

New Provider application process

Our team of experts will carefully review and analyze your pensions, ensuring you have a clear understanding of your pension funds and the potential options available to you. We will then explain the implications of the report, addressing any questions or concerns you may have.

Managing the transfer

We will manage the entire documentation process for you, handling the application process with your new provider, including the completion of necessary forms. Whether online or in physical copies, we’ll ensure the new pension provider obtains the required permissions to initiate the transfer process by contacting your current provider.

Finalising the process

Pension transfers typically take about six weeks but may take longer, depending on provider processes and the timely exchange of information. Your investments remain active during the transfer, ensuring no loss of pension periods.

Optimize your retirement funds and protect your future. Book your appointment and start now!

Most frequent questions (FAQs)

Is there any cost to transfer my pension?

Transferring your pension incurs definite costs, potentially outweighed by the benefits from your new provider. To assess the benefits, it’s crucial to understand your current provider’s exit costs, which may involve an exit fee, often a percentage of your total value. This percentage can be substantial, and there might be an additional processing fee hidden in your original agreement. Identifying all charges is essential, and if uncertain, seeking independent advice from a financial consultant is recommended. Without careful consideration, transfer costs may negate anticipated long-term gains.

Transferring your pension between recognized providers won’t impact the tax status of your pension. However, moving your pension elsewhere or taking a lump sum before the transfer is deemed an unauthorized transfer, subjecting it to taxation. In Ireland, be mindful that you’re entitled to a tax-free pension lump sum of up to €200,000 in your lifetime. Beyond this limit, amounts ranging from €200,000 to €500,000 incur a 20% tax, and the remainder is taxed at your marginal rate.

If you have a private pension from working in the UK, it is likely you will be able to transfer your benefits. There are certain benefits of transferring your pension back to Ireland like: 

Retire here in Ireland

Several individuals employed in the UK for an extended period intend to retire in Ireland. Bringing your pension back to Ireland provides the chance to collaborate with a native financial advisor well-versed in the Irish financial landscape.

You may not have to pay tax charges

A Qualifying Recognised Overseas Pension Scheme (QROPS) has the capability to receive pension transfers from the UK without potentially causing a tax penalty.

Facilitate inheritance of your state

Keeping your pension in the UK might increase the complexity for your estate upon your demise. Transferring it to Ireland could ease some of this burden.

While there is no strict maximum age for a pension transfer, age plays a crucial role in determining the advantages of a pension transfer. While the initially appealing predicted payout might catch your attention, considerations tied to your entire career come into play. For instance, if you are nearing retirement age, the benefits of moving may be less significant. Breaks in your pension plan throughout your career can also impact the overall outcome. Since pensions accumulate valuable bonuses over time, moving your pension later in your career poses the risk of losing these benefits, with insufficient time left until retirement age to regain them with a new provider.

Business Owners

Employees (PAYE)

If you still have any questions, please make an enquiry, or freephone us, and we will be happy to assist you.

Freephone (1800) 808-808

 

Contact us to maximise your retirement potential

Let us guide you towards a brighter financial future

Maximise your retirement potential and achieve your financial goals with a tax-efficient pension review. Schedule your consultation today with our award-winning advisors and enjoy the benefits of a well-planned financial future.

Make informed decisions. Explore our related additional material and stay up-to-date.

Follow us on Social Media

Follow us on social media for real-time updates on our latest campaigns, giveaways, and much more. Stay in the loop with exclusive content and exciting insights for your financial independence.

Career opportunities at True Wealth.

At True Wealth, we believe everyone deserves access to expert financial advice, regardless of their current wealth or financial situation. If you have a passion for connecting with people and aspire to thrive in a culture built on trust, integrity, dedication, and excellence, this could be the perfect fit. Let’s grow together!