Transfer A Drawdown Pension

Pension transfer FAQs

• How long does it take to transfer a drawdown pension?

  If your drawdown pension is transferred as cash, this means your provider will sell your pension investments, and transfer the cash amount. You will not be invested during the transfer, so you will not make losses or gains. You can buy investments once the transfer is complete. Electronic transfers of this type usually takes between 2-4 weeks. Non-electronic transfers may take longer.

  If your drawdown pension is transferred as it is (invested in the stock market), your provider will transfer each investment and any cash. If you hold an investment that we don’t offer, we’ll contact you during the transfer to check if you’re happy to sell your investments. This type of transfer can take several weeks, depending on your investments and provider. You stay invested during the transfer, so could make gains and losses. Usually, you cannot trade until the transfer completes.

  Timeframes also depend on actions from your existing provider. Before we can set up your drawdown arrangement (and pay any income) we need to receive certain information from them.

• Can I transfer my drawdown pension to an annuity?

  Retirement isn’t all or nothing. You can use some or all of the money in a drawdown pension to buy an annuity. Even if you’ve already drawn an income.

  Although annuities offer a secure income for life, they lack flexibility. This is one of the reasons people choose to combine their retirement options.

  What you do with your pension is an important decision. If you're not sure what to do you should seek guidance from Pension Wise, the government’s free impartial service to help you understand your retirement options. If you need more help, you could consider financial advice.

• What are the charges to transfer a drawdown pension?

  We don’t charge you to transfer your drawdown pension, but you should check with your current provider if they’ll charge you any exit fees, or if you’ll lose any guarantees by transferring. Make sure you do this before you start your transfer.

  View our charges

• Can I transfer a defined benefit (DB) pension to drawdown?

  Defined benefit (DB) pensions, such as ‘final salary’ schemes that are already in payment cannot be transferred to a drawdown pension.

  DB pensions that aren’t in payment could potentially be transferred to a personal pension (like the HL SIPP), and then moved into drawdown. However, it’s probably not in your best interest. DB pensions not only give you a guaranteed income, they also normally offer benefits to a spouse or partner once you die. You might be able to transfer, but if the transfer value is more than £30,000, you’ll have to take advice from a regulated financial adviser. If you’d like to transfer to HL, you’ll also need to provide proof that the advice is in favour of transferring.

• Can I transfer my drawdown pension to another provider?

  Yes, if you’re current provider isn’t meeting your needs, you can choose to transfer to another provider.

• Can I transfer my capped drawdown pension to HL?

  Yes, you’re able to transfer a capped drawdown pension to HL. However, you’ll also have the option to convert to flexible drawdown (where income isn’t restricted) when you apply. Remember though, this is an irreversible decision. Once you take income from flexible drawdown your contributions into money purchase pensions, like the HL SIPP, will normally be restricted by the Money Purchase Annual Allowance (MPAA) - currently £10,000 each tax year.

  If you’d like to transfer a capped drawdown account to HL, but you already hold a flexible drawdown arrangement with us, we’ll need to convert your capped arrangement to a flexible one upon transfer.