Types of Pension Transfers Explained

Introduction

Pension transfers can occur in several different forms, depending on the type of pension being transferred and the destination scheme. While all pension transfers involve moving pension savings from one registered pension scheme to another, the rules, processes and safeguards applied can differ significantly.

Understanding the different types of pension transfers helps explain why some transfers are straightforward, while others involve additional checks or restrictions.

This guide explains the main types of pension transfers within the UK pension system and how they are classified.

Broad Categories of Pension Transfers

At a high level, pension transfers can be grouped based on:

• the type of pension being transferred
• the nature of the receiving scheme
• whether additional safeguards apply

These categories are defined by pension legislation and regulatory rules.

Defined Contribution to Defined Contribution Transfers

What Is a DC to DC Transfer?

A defined contribution (DC) to defined contribution transfer involves moving pension savings from one DC pension scheme to another.

Examples include:

• workplace pension to another workplace pension
• workplace pension to a personal pension or SIPP
• personal pension to a SIPP

This is one of the most common types of pension transfer.

How DC to DC Transfers Typically Work

In a DC to DC transfer:

• the value of the pension pot is transferred
• assets may be transferred as cash or in-specie
• no guaranteed benefits are being given up

These transfers usually involve fewer restrictions than other transfer types.

(Related guide: How Pension Transfers Work → Guide C2)

Workplace Pension Transfers

Transferring a Deferred Workplace Pension

When an individual leaves employment, their workplace pension often becomes a deferred pension. This pension may remain invested within the scheme or be transferred to another arrangement.

Workplace pension transfers are a common feature of job changes.

(Related guide: Transferring a Workplace Pension → Guide C6)

Defined Benefit Pension Transfers

What Makes DB Transfers Different?

A defined benefit (DB) pension provides a promised level of income rather than a pot of money. Transferring a DB pension involves giving up future scheme benefits in exchange for a transfer value.

Because of this:

• additional safeguards apply
• regulatory requirements are stricter
• professional advice may be required by law

DB transfers are treated differently from DC transfers.

(Related guide: Defined Benefit Pension Transfers Explained → Guide C7)

Cash Transfers vs In-Specie Transfers

Cash Transfers

In a cash transfer:

• pension assets are sold
• the cash value is transferred
• the receiving scheme reinvests the funds

Cash transfers are the most common method.

In-Specie Transfers

In an in-specie transfer:

• assets are re-registered
• investments are not sold
• market exposure may be maintained

Not all schemes support in-specie transfers.

Partial vs Full Transfers

Full Transfers

A full transfer involves moving all pension benefits from one scheme to another.

Partial Transfers

A partial transfer involves moving only part of the pension benefits. Whether partial transfers are permitted depends on:

• scheme rules
• pension type
• regulatory requirements

Partial transfers are less common and may be restricted.

Overseas Pension Transfers (High Level)

Some pension transfers involve moving UK pension benefits to an overseas pension scheme. These transfers are subject to:

• additional checks
• reporting requirements
• jurisdiction-specific rules

Overseas transfers are structurally different from UK-to-UK transfers.

(Related guide: Overseas Pension Transfers Explained → Guide C8)

Transfers Involving QROPS (High Level)

Qualifying Recognised Overseas Pension Schemes (QROPS) are overseas schemes recognised by HMRC for receiving UK pension transfers.

Transfers involving QROPS follow specific rules and reporting requirements.

(Related guide: QROPS Explained (Factual) → Guide C9)

Why Transfer Types Matter

Different transfer types:

• follow different processes
• involve different safeguards
• have different timescales

Understanding transfer types helps explain why pension transfers are regulated and why additional steps may apply.

Common Misunderstandings

“All pension transfers are treated the same”

Different pension types involve different rules and safeguards.

“Defined benefit transfers are just another transfer”

DB transfers involve additional statutory requirements.

“In-specie transfers are always available”

Availability depends on scheme support.

“Overseas transfers follow UK transfer rules”

Overseas transfers involve additional frameworks.

How This Guide Fits Within the Pension Transfers Hub

This guide classifies the different types of pension transfers and supports:

• understanding of transfer processes
• explanations of transfer timescales
• regulatory safeguard guidance

It acts as a reference point for more detailed transfer guides.

Summary

Pension transfers can take different forms depending on the type of pension and destination scheme. Common transfer types include DC to DC transfers, workplace pension transfers, defined benefit transfers, and overseas transfers.

Each type of transfer is subject to its own rules, processes and safeguards under the UK pension system.