A pension transfer occurs when a person's entitlements under one pension scheme are moved to another pension scheme. The transferring scheme transfers relevant assets to the receiving scheme and the receiving scheme becomes responsible for the provision of benefits in respect of the relevant person.

The members of all UK registered pension schemes which are personal pension schemes have an overriding statutory right to transfer the cash equivalent value of their benefits to another pension arrangement, subject to meeting certain prescribed conditions.

Many personal pension schemes also permit transfers out in a broader range of circumstances than those in which the statutory right arises, eg:

1. •

   partial transfers

2. •

   transfers of benefits that are in drawdown, and

3. •

   transfers of particular assets in non-cash form

It is important in practice that transfers paid from personal pension schemes are paid in circumstances that amount to the payment of a recognised transfer for HMRC purposes and that do not unwittingly lose the benefit of any tax-related protections and statuses that the member may have.

Personal pension