Transferring a Protected Rights Pension

Protected rights pensions result from older pension rules, but many people still hold them as part of legacy plans or schemes. If you’ve got one of these pensions, you might be wondering whether it’s possible to carry out a protected rights pension transfer.

Here, we’ll explain what you need to know about transferring a protected rights pension, what your options are, and what to consider before moving.

Can you transfer a protected rights pension?

In most cases, yes. After changes to UK pensions in 2012, “contracting out” was gradually phased out, which meant abolishing protected rights, and your pension automatically converted to a standard defined contribution (DC) pension. So, protected rights pensions can now be transferred in the same way as other DC pensions.

A protected rights pension transfer is generally possible as long as the receiving pension scheme accepts DC transfers and the transfer doesn’t involve any safeguarded or guaranteed benefits, or guaranteed annuity rates (GARs).

However, some older pension providers may still apply legacy rules or restrictions around transfers, which is why checking the details of your specific plan is essential before attempting to initiate a transfer.

Where can you transfer these pensions to?

If you’re transferring a protected rights pension, you usually have several options available, just like you would when transferring or consolidating other types of DC pensions. The most common destinations for pension transfers include:

• A modern personal pension.

• A workplace pension scheme.

• A self-invested personal pension (SIPP).

• A Qualifying Recognised Overseas Pension Scheme (QROPS).

Many people choose to transfer a protected rights pension to a SIPP, largely because this type of pension offers the greatest level of flexibility in terms of fees, investment choice, ease of access, and clear retirement options.

However, the best destination for your protected rights pension transfer depends on your personal circumstances and retirement goals.

Should you transfer your protected rights pension?

Whether you should transfer your protected rights pension depends on your individual financial circumstances and the existing features of your current plan.

For the most part, it’s best to think of your protected rights pension as you would any other type of DC pension. So, a transfer may be worth considering if:

• Your current pension has high charges.

• Your investment options are limited.

• The pension is difficult to manage or access.

• You want to consolidate multiple pensions into one plan.

• You’re considering drawdown or flexible retirement options.

However, transferring isn’t always the right choice. Some older pensions include guarantees or benefits that could be lost if you transfer out.

So, it’s always worth reviewing your current pensions with an independent, FCA-regulated adviser to know exactly where you stand.

How to transfer your pension

The process of transferring a protected rights pension is similar to other DC pension transfers, but it’s important to get the details right. The typical transfer steps include:

1. Discussing your current situation and goals with an experienced pension adviser.

2. Locating your protected rights pension and obtaining a transfer value.

3. Choosing a suitable scheme to move your protected rights pension to.

4. Completing any transfer paperwork required by your new pension provider.

5. Waiting for the transfer to take place and the funds to move across.

A pension transfer plan involving protected rights should always begin with a review of current charges, benefits, and any restrictions.

Errors at this stage can be costly and difficult to reverse. If you’d like an independent financial adviser to carry out these checks for you, you can get started below:

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What to consider before transferring

Before you go ahead with a transfer of a protected rights pension, there are several key things to consider first:

• Whether your existing pension includes annuity guarantees or protected benefits.

• How the charges for your existing plan compare to your new one.

• The types of investment and asset choices you want access to.

• A solid understanding of your own risk appetite.

• How and when you plan to access your pension in retirement.

• If your pension includes safeguarded benefits worth £30,000 or more, regulated financial advice is legally required before transferring.

Aside from transferring your protected rights pension, some alternative strategies to look into include:

• Leaving the pension where it is.

• Consolidating it into your current workplace scheme.

• Partially transferring some funds (if the provider allows this).

Speak to an independent pensions adviser

Transferring a protected rights pension can be straightforward, but legacy pension plans often hide complexities that aren’t immediately obvious. Getting this wrong could mean losing valuable benefits or paying unnecessary charges.

An independent, FCA-regulated pensions adviser can review your protected rights pension, explain your options clearly, and help you decide whether transferring is in your best interests.

Here’s why people trust us to help them when transferring a protected rights pension:

• Our advisers are independent, giving you the widest choices

• Free initial pension chat with no obligation to proceed further

• Get tailored advice based on your pension transfer goals

• Access to pension specialists with experience in complex transfers

If you’d like a free, no-obligation chat with a qualified pensions adviser about transferring a protected rights pension, you can get started here.