You cannot transfer out of the Pension Protection Fund once your scheme is in it, but you can choose when, and how, to take your compensation.
Many people who ask whether they can move money out of the PPF, or "withdraw" it, have heard that their employer's scheme is in trouble. Pension Wise is free guidance backed by government, but its appointments cover defined contribution pensions, so for compensation the PPF itself is the first call. Seeing PPF compensation next to workplace pots and the State Pension is easier with help from an FCA-authorised adviser, whose call costs you nothing; to arrange that, fill the form on this page.
Pension Protection Fund: can you transfer out of it?
No. The PPF's member booklet puts it in one line: "It’s important to remember that benefits cannot be transferred out of the PPF." When a scheme moves across, the PPF says its members "receive pension payments from us rather than a pension from your former scheme", and those payments are what it calls compensation.
Can you transfer before or during the assessment period?
Before an assessment period starts a transfer may still be possible. During one it generally is not. The PPF says that if your scheme is not in an assessment period "you might be able to transfer out your benefits into an alternative pension arrangement, such as a defined contribution pension", and that the way to check is to ask the scheme trustee or administrator. It adds that once the scheme "has already entered an assessment period, by law, it's generally not possible to transfer out your benefits."
| Stage | Transfer out? |
|---|---|
| Employer solvent, no assessment period | May be possible; ask the trustees or administrator |
| Assessment period under way | Generally not possible |
| Scheme has moved into the PPF | Not possible |
The law behind the middle row is section 135 of the Pensions Act 2004. It says that during the assessment period, "except in prescribed circumstances and subject to prescribed conditions", "no transfers of, or transfer payments in respect of, any member’s rights under the scheme rules are to be made from the scheme". The exceptions are in regulation 16 of the Pension Protection Fund (Entry Rules) Regulations 2005: a transfer can still be paid if, before assessment began, the member had received a written statement of the cash equivalent (the transfer value) and had applied to take it, without withdrawing that application. Even then the trustees must be satisfied it is consistent with keeping any shortfall to a minimum, and must cut it to no more than the cost of securing benefits matching PPF compensation.
The PPF says assessment takes two years on average and has to be finished before a scheme can be taken over. How assessment is triggered is on the Pension Protection Fund explained page. If a two-year assessment could overlap your planned retirement date, an FCA-authorised adviser can map out that gap over the phone, free, whenever you choose to send the form on this page.
What you can do with PPF compensation instead of transferring
The booklet and the PPF's retirement FAQs describe these routes, each with conditions:
- Take it early. From 55, with a lower age only where your former scheme gave a protected pension age (the PPF mentions 50) or in the terminal-illness case below. That minimum age is expected to go up from 55 to 57 on 6 April 2028, the PPF notes. Payments start sooner and run longer, so they are reduced; the early retirement factors show how.
- Take it later. You can put payments off until 75, with a late retirement factor raising them. Delay is not possible once part of your entitlement is already being paid.
- Exchange part for a lump sum. The PPF says that "in most cases you can take up to 25 per cent of the value of your compensation as a tax free lump sum" at retirement.
- Take it all as a trivial lump sum. This is open only if you are aged between 55 (or earlier with a protected pension age) and 75, and the value of all your pension benefits, from other schemes as well as the PPF, is under £30,000. Trivial lump sums from other schemes taken alongside it must all be taken within 12 months, and the PPF says 25 per cent of a trivial commutation lump sum would be tax free.
If you are living with a terminal diagnosis, you can talk to Samaritans free, at any hour, on 116 123. For a member with twelve months or less to live, the booklet describes a one-off lump sum in place of regular payments; the death benefits page has the detail.
Divorce is not a transfer: sharing PPF compensation
A court can split compensation on divorce without moving it out of the PPF. The PPF says that if you divorce after the scheme has moved across, the court can make a compensation sharing order, "a Court Order splitting the compensation you’re entitled to between you and your ex-spouse, who’ll then become a PPF member with their own entitlement to PPF compensation". If you are asked for a valuation during the divorce, you ask the PPF for a cash equivalent value, which it describes as the value of your benefits as a lump sum for divorce purposes.
That is a different order from the one used on an ordinary pension. Pension sharing order vs pension compensation sharing order sets out the difference, and what happens to your pension on divorce covers the wider picture.
If your scheme is not in the PPF yet: what to weigh before transferring
The PPF's guidance for members of a scheme not yet in assessment is to talk to the trustee or administrator, and it states what leaving costs: "You’ll be giving up both a valuable level of predictability in your retirement income and the protection we provide in the event of employer insolvency." The FCA agrees with the direction: "The FCA and The Pensions Regulator (TPR) believe it’s in most people’s best interests to keep their DB pension. You can’t reverse a transfer, so you need to make sure you understand the risks so you can make an informed decision."
The PPF says independent advice is a legal requirement if the value of your safeguarded pension pot exceeds £30,000, and it warns: "Be wary of people approaching you directly to offer transfer advice at a time your employer is reported to be in financial distress, as this could be a scam." The FCA's pension scams page adds that an unexpected call about your pension should be hung up on. The FSCS notes that the value of investments "can go down as well as up", so a defined contribution pot you move into may end up worth less than was paid in.
For the reasoning on whether to move at all, see should I transfer my final salary pension?, how a transfer value is worked out and how to transfer a pension. How the PPF fits with other safeguards is in are final salary pensions protected?, and the wider scheme type is in the final salary pension guide.
Withdrawing from the PPF: four common queries
Who do I ask if my employer's scheme may be heading for the PPF?
Start with your scheme trustee or administrator, who the PPF says will tell you about important developments. Once you are a PPF member, the booklet gives 0330 123 2222 for the PPF's own helpline.
If I transfer out before an assessment starts, am I still protected by the PPF?
The PPF says you would be giving up "the protection we provide in the event of employer insolvency". It also says a transfer typically cannot be reversed, which is why the advice rules and the FCA's caution above matter.
Can I take all my PPF compensation as cash?
Not in the ordinary course: the PPF says up to 25 per cent can be exchanged in most cases. The exceptions are the trivial lump sum, with the age and £30,000 conditions set out above, and the terminal-illness lump sum.
Could a transfer offer made while my employer is struggling be a scam?
The PPF says it could, and the FCA says unexpected calls about your pension are illegal and probably a scam. Check any adviser on the FCA register before sharing details.
Should it still be unclear how this applies to your own pensions, the form on this page brings the explanation from an FCA-authorised adviser by phone, free.
Sources: PPF, Welcome to the PPF (PPF05 MAY 2026), Worried about your pension?, What happens if your employer becomes insolvent, member page, retirement FAQs and divorce FAQs; Pensions Act 2004, section 135; PPF (Entry Rules) Regulations 2005, regulation 16; FCA, DB transfers and scams; MoneyHelper, Pension Wise; FSCS, Investments; Samaritans.