Should you transfer a with-profits pension?

Should I transfer my with-profits pension? Check four things first: market value reductions, guarantees, a final bonus and exit charges.

Moving a with-profits pension is hard to reverse, and what you would give up may be written into a policy taken out many years ago. This page lists what MoneyHelper, the FCA and providers say to look at before a transfer; it does not say which way to go. Old with-profits papers are hard going, so an FCA-authorised adviser can read yours with you after you give your phone number in this page's form; Pension Wise offers free guidance as well.

Should I transfer my with-profits pension? Four checks before you ask

MoneyHelper's transfer guide says: “Always check if your existing pension schemes have any special features or guarantees – and if there are exit fees or other penalties for leaving.” Its two examples are a terminal bonus on a with-profits fund and a guaranteed annuity rate, and it adds that “A pension transfer usually cannot be undone, so always make sure you’ll be better off before committing.”

That turns into four questions for your provider, ideally answered in writing:

• If I left now, would a market value reduction be taken off the value?
• Does my policy carry a guarantee that a new pension would not give me?
• Is there a final bonus that I would miss, or that is already counted in the figure?
• Would any exit charge or other penalty apply, and how much would it be in pounds?

The next sections take them one at a time. How a transfer is carried out is in how to transfer a pension, and what the receiving side may charge is in pension transfer fees.

Market value reductions: why a transfer value can come in below the fund value

Aviva's page on transferring into an Aviva pension tells people to find out first whether their current provider would impose a market value reduction on any with-profits funds, noting: “A Market Value Reduction (MVR) can apply to some types of with-profits funds.” It describes an MVR as “an adjustment factor that can be applied to those leaving a with-profits fund at times other than those specified in the terms and conditions, particularly following a large or sustained fall in the stock market or when market conditions mean that investment returns are lower than expected.” On Aviva's description, the dates in a policy's terms and conditions matter, and whether a reduction applies can depend on markets; for your own plan, it is your provider's policy wording that decides.

The type of fund matters as well. Aegon's guide says market value reductions can feed into payouts on its traditional and unitised with-profits funds, while its New Generation funds use smoothing reductions and increases at payout instead.

FCA rules (COBS 19.4) require providers of personal pensions, stakeholder pensions and retirement annuity contracts, among others, to send a one-page summary with each open market options statement, and COBS 19.4.6C says that summary must include “any other relevant special features, restrictions, or conditions that apply, such as (for with-profits funds ) any market value reduction conditions in place, and how to find out further information”. How a reduction is worked out and applied has its own guide: what a market value reduction is.

Guarantees: what the policy promises and what moving could end

Aegon says with-profits investments “may include guarantees of minimum payouts at certain defined points in time”, but that it does not “otherwise guarantee the amount you'll receive back”. Its own guarantees, it says, “will no longer apply if you cash in your With-Profits investment early, including if you transfer, make an investment switch or surrender your plan.” Its New Generation plans carry no investment guarantees at all, so the fund type and the dates in your own policy are the points to confirm with your provider.

The FCA's one-page summary rule also asks for “a statement about whether any guarantees apply and, if so, where to find out further information”. The best-known guarantee is a guaranteed annuity rate; what a guaranteed annuity rate is and whether it is worth keeping cover that, so it is not repeated here.

Terminal bonus and exit charges: costs outside the headline value

Among features you could lose by moving, MoneyHelper lists money in funds that “pay an extra payment after a certain date”, with a with-profits fund as its example; this is typically called a terminal bonus. Aegon calls it the final bonus and says it is “a non-guaranteed amount that may be added to the value of your plan when a claim is made on the plan”. Because it is not guaranteed, a final bonus can be neither assumed nor ruled out. Aegon's wording is about a claim on the plan, and whether a transfer is treated in the same way is something your own provider has to confirm; an adviser can explain that point on a call-back if you use the enquiry form.

Exit charges are a separate item. The same FCA summary rule says that, where relevant, it must warn that the current value of the savings “may be subject to early exit charges or other withdrawal charges when accessed”. Ask for any such charge as a figure in pounds, and ask whether it is separate from any market value reduction.

Can I transfer a with-profits pension, and is there a calculator?

MoneyHelper says you “can usually transfer or consolidate your pensions at any point, unless the scheme rules list restrictions”. A with-profits pension is not singled out, so the policy terms are the place to check. The figure that can be paid is the transfer value your provider quotes: MoneyHelper's own steps say to ask your current provider for a transfer value and the information they need for a transfer. An estimate from elsewhere is not a quote.

Be wary of anyone who contacts you out of the blue. The FCA says: “If you get a call out of the blue (a cold call) about your pension, the safest thing to do is hang up.” Its pension scams page and your scheme's own transfer checks are the places to start, and the rules and red flags for transfers go further. Delays are covered in how long a transfer takes.

What people ask about moving a with-profits pension

How do I find out which kind of with-profits fund I hold?

Ask the provider to confirm it in writing, because the type changes how bonuses, guarantees and reductions work. Aegon, for example, names three types it has offered, traditional, unitised and New Generation, and treats each differently.

Is a market value reduction the same as an exit charge?

The FCA's one-page summary rule lists them as separate items: an exit-charge warning in one place, and market value reduction conditions for with-profits funds in another. Ask for each figure separately.

Can a market value reduction change before I decide?

Aviva ties its description to times outside those in the terms and to market conditions, so whether one applies is not fixed. Your provider can tell you the position today, and it is worth asking again close to any transfer date.

Where do I find what my policy guarantees?

Start with the policy conditions you were given when the plan began, and with the one-page summary sent with any open market options statement; FCA rules say that summary must state whether any guarantees apply and where to learn more. If those are unclear, ask the provider to put it in writing.

Does moving a pension with guarantees trigger a rule about advice?

It can. If the policy holds safeguarded benefits, such as a guaranteed annuity rate, and their transfer value is over £30,000, the scheme has to check you took appropriate independent advice before it pays the transfer (SI 2015/742, as substituted from 6 April 2018). The guide to the advice requirement explains how that check works.

Values in with-profits and other funds can fall as well as rise, and Aegon warns that you may not get back the amount originally invested. To talk your own with-profits policy through before deciding, add your phone number to this page's quick form; an FCA-authorised adviser will ring, which costs you nothing.

Sources, accessed 26 October 2026: MoneyHelper, Should I transfer or combine my pensions?; Aviva, Transferring into an Aviva Pension to access drawdown; Aegon, With-profits useful information; FCA Handbook, COBS 19.4; FCA, Pension scams.