Transferring frozen pensions
Learn what frozen pensions are and how to track or transfer a frozen pension to interactive investor
Important information: A SIPP is for those wanting to make their own investment decisions when saving for retirement. As investment values can go down as well as up, the amount you retire with could be worth less than you invested. Usually, you won’t be able to withdraw your money until age 55 (57 from 2028). Before transferring your pension, check if you’ll be charged any exit fees and make sure you don't lose any valuable benefits such as guaranteed annuity rates, lower protected pension age or matching employer contributions. If you’re unsure about opening a SIPP or transferring your pension(s), please speak to an authorised financial adviser.
What is a frozen pension?
A frozen pension is a workplace pension which you no longer contribute to and are not withdrawing an income from.
A ‘frozen pension’ is not really frozen. A pension which you and your employer have stopped paying into will remain open and invested. It could still grow through interest and investment. The administrators of a frozen pension are likely to continue charging fees.
Frozen pensions are also known as deferred pensions.
How do I find frozen pension pots?
Employers are required to enrol employees into pension schemes. If you have had several jobs, there is a good chance you have at least one frozen pension.
To find a frozen pension you should contact your old pension provider directly. If you do not know who your provider was, you can contact the HR department of your old employer. They should be able to provide you with the details of the pension plan.
Another option is to use the government’s pension tracing service. This helps you to find the details of your former employers and pension providers.
Can I transfer a frozen pension?
You can transfer most frozen pensions. Many workplace pension schemes allow you to transfer in an old workplace pension. Alternatively, you can transfer a frozen pension into your SIPP or personal pension.
Many people choose to consolidate their pensions into one pension scheme. By doing this, you could save money on fees and reduce paperwork. However, you also have the option to continue to defer a pension until you can access it. This option could be beneficial if you are happy your scheme’s performance or if it has safeguarded benefits which would be lost in a transfer.
Some pensions are not transferable. For example, ‘unfunded’ public sector defined benefit pensions for professions such as teachers, NHS workers, civil servants and the emergency services. Check with your provider, or a pensions expert, if you are unsure whether you can transfer your pension.
Although many defined benefit pensions can be transferred, if you have a transfer value worth more than £30,000, you will also have to seek professional advice. This is because they provide guaranteed income in retirement, which cannot be replicated with a personal pension.
Will I have to pay any charges if I transfer my frozen pension?
Depending on your provider, you may have to pay charges when you transfer a pension. Check with your current provider before you transfer.
At ii, we do not charge fees for transferring in or out.
Will a frozen pension grow over time?
Frozen defined contribution pensions remain invested over time, so your pension could grow in value. However, there is also the possibility it could go down in value.
If you have a frozen defined benefit pension, your annual retirement income may freeze when you leave the scheme. However, it could continue to rise with inflation. Each scheme has its own rules.
Why transfer a frozen pension to interactive investor?
If you want to combine your pensions for a simpler retirement, you could transfer your frozen pensions to the ii SIPP. With a SIPP, you can take control of your pension by managing how and where it is invested.
- We do not charge a transfer fee and it is free to leave
- Choose from one of the widest ranges of investments on the market
- Access a range of flexible ways to take your retirement income
Frozen pension FAQs
The ii SIPP is aimed at clients who have sufficient knowledge and experience of investing to make their own investment decisions and want to actively manage their investments. A SIPP is not suitable for every investor. Other types of pensions may be more appropriate. The value of investments made within a SIPP can fall as well as rise and you may end up with a fund at retirement that’s worth less than you invested. You can normally only access the money from age 55 (age 57 from 2028). Prior to making any decision about the suitability of a SIPP, or transferring any existing pension plan(s) into a SIPP we recommend that you seek the advice of a suitably qualified financial adviser. Please note the tax treatment of these products depends on the individual circumstances of each customer and may be subject to change in future.