In the past, the key consideration for an adviser contemplating consolidation was whether it was demonstrable that taking into account the costs of transferring that the policyholder will be in a better position post transfer than they were before.
Following the pension freedoms which were implemented in April 2015, advisers now must contemplate a greater array of factors than ever before when considering pension consolidation.
A key difference between pension contracts these days will be the underlying provider’s rules for that arrangement to allow different investment strategies and/or access to flexible drawdown as per the new pension freedom legislation.
However, it is vital that advisers carefully consider whether the rewards of a transfer such as the greater investment freedom granted by the likes of a self invested personal pension wrapper or lower costs are outweighed by giving up on guarantees attached with an existing scheme.
The ramifications of getting a pension transfer wrong can be far-reaching, and not just restricted to an initial transfer penalty.
This guide will explain who should contemplate pension consolidation, what factors need to be considered when looking to transfer and the pros and cons of different vehicles cash could be pulled into.
Supporting material for this guide was produced by Claire Trott, head of pensions technical at Talbot and Muir; Adrian Mee, consultant at Mattioli Woods; David Brooks, technical director at Broadstone; David Trenner, technical director of Intelligent Pensions and Martin Tilley, director of technical services at Dentons.