When we find the details of a pension, we check if it has any special benefits or exit fees attached that could be lost or reduce the value of your pot if you transfer. Here’s what that means, and why it matters. 🔍
What are special benefits?
Some older pensions come with extra features you don’t usually get in newer plans. These are called "special benefits" and may include:
A Guaranteed Annuity Rate (GAR) – this promises a certain income for life, usually higher than current rates.
A Protected Tax-Free Cash amount – more than the standard 25% tax-free lump sum.
Defined Benefit Pension – pays a guaranteed retirement income based on the number of years you worked for an employer and other factors, rather than the amount of money you paid in and the fund performance.
These benefits can be valuable—but if you transfer out, you lose them forever. That’s why we won’t transfer pensions with these features attached. ❌
What are exit fees?
Exit fees are charges for moving your pension to another provider. These are more common in older plans and can reduce the amount that gets transferred.
How does Penny handle pensions like this?
If we find that one of your pensions has special benefits or exit fees, we will clearly flag this in the app. You’ll be able to see the details of this pension and that a special benefit/exit fee is attached to the policy. If you have any questions, our team will be happy to answer them.
We won’t transfer any pension with special benefits or exit fees unless you tell us you want to go ahead—and even then, only after you’ve received the proper advice or provided extra confirmation. 🔒❌
This is to protect you and your retirement savings.