Moving an old workplace pension into a SIPP is one of the more common pieces of consolidation expats do, and while the process is generally straightforward, there are a few checks worth making at each stage. Here’s what it actually involves.
Step One: Confirm It’s a Defined Contribution Pension
Before anything else, confirm your workplace pension is defined contribution rather than defined benefit (final salary). This should be clear from your scheme documentation or annual statement – if you’re not certain, it’s worth checking before proceeding, since a defined benefit pension follows a completely different, legally required advice process rather than a straightforward transfer.
Step Two: Check What You’d Be Giving Up
Some workplace pensions, particularly older ones, carry features worth knowing about before moving – a guaranteed annuity rate, life cover, or enhanced ill-health retirement terms bundled into the scheme. None of these automatically transfer with the pension itself. Review your scheme documentation, or ask the provider directly, what specifically you’d be giving up by moving.
Step Three: Check for Exit Penalties
Older policies sometimes carry exit penalties or market value reductions applied on transfer. These need to be factored into whether moving actually makes financial sense – a penalty can sometimes outweigh the benefit of consolidating, particularly for a smaller pot.
Step Four: Choose a SIPP Provider That Actually Suits You as an Expat
Not every SIPP platform accepts or continues to service non-UK residents – some restrict or close accounts for clients who move abroad after opening. Check specifically whether a prospective provider explicitly supports non-UK residents, what currencies and investments it offers, and how it handles identity verification and correspondence for someone without a UK address.
Step Five: Request the Transfer
Once you’ve chosen a receiving SIPP, the transfer is typically initiated by the new provider, who requests the transfer directly from your existing workplace scheme on your behalf – you’re not usually required to physically move money yourself. Most transfers happen in cash, meaning your existing investments are sold and the proceeds move across before being reinvested; in-specie transfers, which move the actual investments without selling them, are possible in some circumstances but aren’t universally available.
Step Six: Expect a Realistic Timeline
A straightforward transfer with a cooperative existing provider can complete in as little as a few weeks. Less digitised or slower-to-respond administrators can push this out to two or three months. Building in a realistic timeline rather than assuming it happens within days avoids unnecessary frustration partway through.
Step Seven: Set Your Investment Strategy
Once the transfer completes, your money typically sits in cash within the SIPP until you actively choose investments – it doesn’t automatically reinvest itself. This is worth doing promptly rather than leaving funds uninvested for an extended period, and it’s where thinking about currency exposure relative to your expected retirement spending becomes relevant.
Step Eight: Update Your Beneficiary Nomination
A SIPP is generally passed to beneficiaries according to a nomination form you complete, not automatically via your will. This is easy to overlook during a transfer but worth doing as part of the same process, particularly if your family circumstances have changed since the original workplace pension was set up.
Step Nine: Keep Your Employer Pension Active If It’s Still Contributing
If you’re still employed and your current employer is contributing to a workplace pension, it’s generally worth leaving that one active rather than transferring it away – this guide is really about old, inactive pensions from previous employers rather than a scheme you’re currently benefiting from through employer contributions.
Where to Go From Here
Our Expat SIPP page covers platform selection, drawdown options and death benefits in full detail, and our Expat Pension Transfers page covers the wider consolidation process. For our mortgage services alongside this, visit our Premier Expat Mortgages homepage.
Frequently Asked Questions
How long does moving a workplace pension to a SIPP usually take?
Anywhere from a few weeks to two or three months, depending on how responsive your existing provider is.
Will my money be reinvested automatically once it arrives in the SIPP?
No – it typically sits in cash until you actively choose an investment strategy.
Should I transfer a workplace pension my current employer is still paying into?
Generally not, if they’re matching contributions – this process is aimed at old, inactive pensions rather than an active scheme.
Get in touch with details of the workplace pension you’re considering moving and we’ll help you work through the checks above.
