How long does it take to transfer a pension?

Category: Pensions & Personal Finances & QROPS

If you decide to transfer your UK pension to a QROPS, how long is it likely to take? That question is one that is frequently asked.

It is not possible to give an exact timeframe, as each individual case will differ, but the transfer is likely to take between two and three months. It can, however, take just a couple of weeks, or as long as six months.

What makes a difference to the time frame?

There are a number of variables which affect how long the transfer into a QROPS will take.

Firstly, you will need to give a letter of authority to your adviser to enable them to begin. They will then be able to contact your current UK pension scheme and clarify what benefits you are entitled to and what the value of your funds will be when you transfer them out.

You will need to verify your name and address, and may be asked to provide documents as part of normal checks under anti-money laundering regulations.

Once the QROPS transfer request is underway, your UK pension scheme provider needs to begin the process of investigating and verifying the transfer application. This can be a lengthy process. Your current scheme provider will need to establish that the scheme into which you are planning to move your money will be suitable and is on the list of approved QROPS schemes, in order to comply with HMRC regulations.

While this is taking place, you and your adviser will need to decide whether the money within your UK pension will be transferred as cash, or as funds. The latter option is likely to be more complicated and may therefore take longer.

If you have more than one pension scheme which you are transferring, then this may also mean that the process ends up taking longer and involves additional due diligence. You will need to contact each pension scheme individually and may need to complete extra forms and provide additional documentation.

Finally, you will need to check that all the necessary documents and information are in order. They will need to be properly signed and certified in order for them to be verified.

How can I reduce the length of the transfer process?

You may not be able to influence the time that it will take for your UK pension scheme provider to process your application to make a transfer to a QROPS. This is because all pension schemes have their own internal processes, which involve checks and balances to ensure that you and other remaining scheme members are being given a fair and equitable deal.

In order to ease the process however, make sure that you have all the documents you need in place before the transfer process begins. This will assist your adviser and avoid any delays later in the process.

Once your adviser has sent the transfer request to your UK pension provider it may send you additional forms to fill in, which you will need to complete and send back.

When the UK scheme provider releases the money from your fund, you and your adviser then need to agree on how and where the money is to be invested.

Why it makes sense to take specialist advice

There are a lot of steps to follow when making the transfer from a UK pension scheme to a qualifying QROPS scheme.

You will need to take into account a number of factors and variables when you are choosing how to make the transfer. Perhaps most importantly, you will need to be aware of the tax laws of the country into which you are making the transfer, as well as any tax liabilities that may arise when you leave the UK.

In addition, you will want to be sure that the jurisdiction into which you are making the transfer has robust and fair regulation and protection for savers and pension scheme members.

That is why it is advisable to talk through the options with an adviser who understands the QROPS market and can help you make informed decisions before you transfer a pension.

If you would like personalised advice from a specialist, please get in touch with bdhSterling today.