GUIDE 3: BENEFITS AND FEATURES
How do I know if I should transfer to you?
Need help to work out if you should transfer your pensions to us? Our pension experts answer some questions we often get asked. Pension transfers are not right for everyone. You should check you're not losing valuable guarantees or features, and you should compare charges and funds.
What do I need to know about benefits and features?
Before you ask us to transfer your pensions to us, you’ll need to check if it's right for you. Ask yourself – what benefits and features do I have? How valuable are they to me?
You’d give these benefits up when you transfer. So, here we answer your questions about the types of feature you’d be likely to want to hold onto.
What’s a protected tax-free lump sum?
Most people can choose to take up to 25% of their pension as a tax-free lump sum from the age of 55. This is rising from 55 to 57 in 2028.
A ‘protected tax-free lump sum’ gives you the right to take more than 25% of the value of your pension as a tax-free lump sum. This normally only applies to occupational pensions that were set up before 6th April 2006.
What’s a protected pension age?
A protected pension age gives you the right to access your pension benefits before the Normal Minimum Pension Age (NMPA).
The NMPA is rising from 55 to 57 in 2028. If you were born after 5 April 1971 this may affect you, but you may still be able to start to take your pension benefits before the NMPA if you have a protected pension age.
You may want to check whether the pension(s) you are transferring have a protected pension age, as these might be affected if you transfer.
You can also check with us if your existing Scottish Widows pension has a protected pension age, and if it does whether it would apply to your transfer.
As well as benefits, what else do I need to think about?
Some pensions also come with other valuable features, such as:
- Life cover
- Terminal illness, or
- Waiver of premium cover.
It’s worth checking if you have these, as you’d give these up when you transfer. You wouldn’t get these with a new pension.
If you have a pension which is invested in a with profits fund, you may get a reduced share of its profits if you transfer out before a certain date. This is known as a market value reduction.
Check if your pension has these before you apply to transfer online. This is because we don’t offer advice as part of our online transfer process.
If you have these, call us to talk about your options.
Where can I find support?
If you need some support before you decide to transfer online, you can call us.
We’ll explain what’s involved in a transfer. We’ll also let you know when you need to speak to an independent financial adviser and where you can find one in your area.
If you’d like to know more about advice so you can decide if you need it, read our guide.
This explains the difference between guidance and independent financial advice. It also explains where you can find it and when you can expect to pay a fee.