Transfers - frequently asked questions

Important note

HMRC’s newsletter 158 has provided the following update on:

Enhanced protection (EP) — transferring to a new provider

Pension scheme newsletter 157 confirmed that the government would bring forward legislation to provide that individuals with enhanced protection can transfer their pension savings to a new provider and carry over the benefit of their protection, even though their permitted maximums for a lump sum or lump sum death benefit currently operate on a per arrangement basis.

Until the amending legislation is effective, schemes should advise members with enhanced protection not to transfer to a new provider, otherwise they will lose the benefit of their protection until the further regulations are made, at which point there would need to be an exchange of information between the scheme which made the transfer and the scheme which received the transfer to determine the member’s permitted maximum under their new arrangement.

Your questions answered.

Yes, if it's a 'recognised transfer', it will be an authorised member payment with no adverse tax consequences.

HMRC Pensions Tax Manual - PTM100010: Transfers: essential principles

No they don’t.

Cheryl does not have the right to remain a member of her ex-husbands scheme; her only option is to move the money to a new arrangement. Because of this it is not treated as a transfer and her adviser doesn’t have to be a PTS.

It depends.

Uncrystallised benefits

Not all benefits need to be transferred at once; they can be transferred in stages. Benefits are not usually tested against the lump sum allowance or the lump sum and death benefit allowance at date of transfer.

Crystallised benefits

If the benefits have been designated to drawdown the whole of the drawdown pension fund or flexi-access drawdown fund under an arrangement must be transferred - a partial transfer is not possible.

HMRC Pensions Tax Manual - PTM100010: Partial transfers

If the individual had enhanced or primary protection the benefits could be transferred to another registered pension scheme after A-Day and they would keep the higher tax-free cash entitlement.

However, the same would not apply to somebody with a tax-free cash entitlement of more than 25% who had not applied for primary or enhanced protection.

These people will lose their entitlement to the higher amount of tax-free cash under the new plan, unless they transfer as part of a 'block transfer' or in certain circumstances on the wind-up of an occupational scheme.

No, an Open Market Option (OMO) is where someone buys an annuity on the open market to take advantage of better annuity rates available from another provider. Rather than securing an annuity from their current scheme.

An OMO can only be used to buy an annuity, it can't be used to provide a different kind of benefit.

As John has an entitlement to more than 25% tax-free cash but no access to drawdown from his current pension scheme, the only way he can access drawdown is to transfer, before taking benefits, to a pension scheme that provides it.

For the higher tax-free cash entitlement to survive the transfer, the transfer will have to be a block transfer or a wind-up transfer.

HMRC Pensions Tax Manual - PTM062400: Open market option

HMRC Pensions Tax Manual - PTM063210: Entitlement to pension

There is nothing to stop you transferring your registered pension benefits between UK pension providers.  However, not all providers allow people resident overseas to start a new pension arrangement.


The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Also it may not reflect the options available under a specific product which may not be as wide as legislations and regulations allow.

All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor.