If you are a non-UK resident, you may have a UK pension which you are looking to transfer. This could be due to inflexibility regarding access, or high fees within the scheme. You may be wondering, therefore, how long should a UK pension transfer take?
This blog will explore the transfer timescales and is prepared on the basis you have been on-boarded as a client and everything is in place to process the transfer.
On-boarding includes our complete client process – understanding your situation, putting together a suitable recommendation and completing all compliance requirements to enable us to provide advice on your behalf.
Submitting the case to the new provider
New providers require the relevant transfer forms to commence the process. We will complete these on your behalf and send them to the receiving scheme (which will either be a SIPP. International SIPP (ISIPP) or QROPS).
The new provider will process the documents (which can take 4-7 working days), and then open up the new pension scheme and request a transfer from the ceding scheme (your existing provider).
Transferring from your old provider
There are two ways a transfer request can be completed by the new scheme:
- Origo – This is the secure online payment system for UK pension transfers, and is only available for SIPP’s. The ceding scheme will process the transfer on Origo, and transfer the monies to your new scheme. Origo has an average transfer time of 11.7 days, but it can take up to 3 weeks depending on the provider.
- Not on Origo – If the provider is not on Origo, or the new scheme is a QROPS, the new provider will send the transfer documents directly to the ceding scheme. The old provider will process the paperwork and request the trustees sell down the funds. They can then send the monies across to the new provider. This can take anywhere between 5 days up to 3-4 weeks. It is unfortunately a slower process than Origo due to the increased administration involved.
The processing times may also differ depending on the type of transfer; defined contribution (DC) or defined benefit (DB) pension.
Once the old provider has sent the money across to the new provider, the transfer is almost complete. The new provider will take away any fees due (advice fees etc) as well as payout any withdrawals. This could be your 25% pension commencement lump sum (PCLS).
The remaining pension pot is sent to the relevant investment product (platform or bond) within the pension scheme. It will then be invested according to the agreed strategy with your IFA. Once invested, you can view your pension online through the relevant platform.
The overall process can take up to 6 weeks from submission of the transfer documents to monies being invested within the new scheme.
From the 1st December 2021, the UK government introduced more stringent legislation to help protect members from potential pension scams. This allows ceding schemes to raise an amber flag where there are concerns with the receiving scheme.
Amber flags could be:
- Transfers to a recognised overseas pension scheme (ROPS).
- High risk or unregulated investments are included in the scheme.
- Fees being charged by the receiving scheme are opaque or excessive.
- Overseas investments included in the scheme.
The new introductions will increase transfer timescales. However, they will also help reduce the number of people affected by scams which can only be seen as a positive.
If you are a non-UK resident looking to transfer your pension, please get in touch with us here at Harrison Brook.