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n simple terms, yes, you can transfer from one SIPP to another. However, with that will
come consequences and the possibility of large fees. Not only that, but it may cause you to
lose your pension perks.
Do You Need One in The First Place?
SIPPs have become a lot more popular since their 90’s release. However, are they suitable
for everyone? In many people opinion, a SIPP is pointless unless you are planning something
crazy or have a business need.
A SIPP may sound like a good thing to have, but in most cases, a normal pension or even a
workplace pension would be sufficient.
Transfer Fee
If you already have a SIPP, but want to transfer to a different provider, you may be in for a
shock. The SIPP provider has to treat the transfer as a sale and purchase. This means the
costs involved could potentially be huge.
For example, if you have £250,000 that you need to transfer, you are going to be paying out
about £6000 in fees. Is that price worth transferring from one SIPP to another?
Can You Gain?
There are other ways to potentially avoid the transfer fee, but it comes with its own risks. If
you have assets in your SIPP, you can make the transfer as cash. Technically this means you
no longer have the assets. However, you can then re-purchase those assets.
The downside is, that during that process, you could have sold the assets, and by the time
you come around the re-purchasing, the market could have risen, meaning you have lost
out. However, if you are lucky, the market could have dropped, meaning you re-purchase
your assets and make money.
Transferring SIPPs is a tricky task. There are costs, fees and a lot of hassle in the process.
However, if you know what the implications could be and still want to go ahead, its best to
talk to your financial advisor.
