When you change jobs, you often leave behind a workplace pension. Over a career, it is common to accumulate several small pension pots with different providers. Transferring these into a single Self-Invested Personal Pension (SIPP) is one option — but it is worth carefully weighing the pros and cons before moving.
When You Can Transfer a Workplace DC Pension
| Situation | Can you transfer? |
|---|---|
| You have left the employer | Yes — full right to transfer |
| Still employed; active member of the scheme | Depends on scheme rules — many allow transfers, some do not |
| Pension in deferral (frozen) with old employer | Yes — you have full transfer rights |
| Defined benefit pension (any size) | See note below |
Defined benefit transfers: If your DB pension has a transfer value above £30,000, you must take regulated financial advice before transferring to a SIPP. This is a legal requirement — not optional. The advice requirement protects members from giving up valuable guaranteed income without understanding the trade-offs.
Before You Transfer — Check for Protected Benefits
Before initiating any transfer, contact your current provider and ask:
- Guaranteed Annuity Rate (GAR): Does the scheme include a GAR? These can be extremely valuable and are lost permanently on transfer
- Enhanced tax-free cash: Is the tax-free cash entitlement more than the standard 25%?
- Protected pension age: Is there a right to access before age 55 (or 57 from April 2028)?
- Exit charges: Any penalties for transferring out?
- With-profits funds: Is your pot in a with-profits fund with a market value reduction (MVR) currently applied?
If any protected benefits exist, think carefully before transferring. For GARs especially, seek regulated advice even if the DC transfer itself does not legally require it.
Comparing Charges: Workplace Pension vs SIPP
One of the most common reasons to transfer is to reduce charges. Under auto-enrolment rules, workplace pension default fund charges are capped at 0.75% per year. Many master trusts charge 0.3–0.5%.
| Option | Typical annual charge |
|---|---|
| NEST (workplace master trust) | 0.3% AMC |
| The People’s Pension | 0.5% AMC |
| Vanguard SIPP | 0.15% AMC (cap £375/year) + fund charges from 0.06% |
| Hargreaves Lansdown SIPP | 0.45% AMC (on first £250k, reduces above) + fund charges |
For smaller pots, a low-cost SIPP may save little over a well-run master trust. For larger pots, the HL cap can make SIPP costs competitive. Use a pension charges calculator to model the long-term impact.
How to Transfer a Workplace DC Pension to a SIPP
- Open the SIPP: Choose a SIPP provider and open an account (takes 10–30 minutes online)
- Initiate the transfer: Provide the SIPP provider with details of your old pension (scheme name, policy number, approximate value). Most providers handle the transfer process on your behalf
- Check for in-specie or cash transfer: Most workplace pensions transfer as cash (funds sold, money moved, funds purchased in new SIPP). In-specie transfers (moving investments directly) are less common and may not be available
- Allow time: Transfers typically take 2–8 weeks. During this time your money is in transit and not invested — the market can move in either direction
- Verify: Confirm the transfer has arrived and is invested in your chosen funds
Consolidating Multiple Pots
If you have several old workplace pensions, consolidating into one SIPP simplifies management and makes it easier to:
- Track your total retirement savings
- Make consistent investment decisions
- Manage drawdown in retirement without juggling multiple providers
- Keep charges lower through scale
Consider not consolidating small pots if: they have protected benefits, you plan to leave them untouched for a long time, or the transfer costs (particularly in time) are disproportionate to the pot size.