Block transfers

1) What is a block transfer?

A block transfer is a means of keeping a protected benefit when transferring to another scheme.

2) Why is a block transfer needed?

It is possible for you to have a pension scheme that holds:

• scheme specific protected tax-free cash that is higher than 25% of the lifetime allowance, OR
• an early retirement age below the minimum pension age

Where this is the case, these protected benefits will be lost when transferring to a new scheme unless it is done as a block transfer or as part of a scheme wind up.

3) Conditions applying to block transfers

A transfer is a block transfer if:

• it is a transfer of the member and at least one other pension scheme member at the same time
• the transfer is made as a single transaction
• the transfer represents all the pension rights under the scheme for all the members transferring as part of that single transaction, and
• before the transfer the member had not been a member of the new scheme for more than 12 months*.

*Unless the member only holds contracted out money in their policy, or where a block transfer is being used to preserve a protected pension age of 55 under the normal minimum pension age legislation (increase of NMPA to age 57), the 12-month membership condition does not apply. A member may therefore have been a member of the receiving scheme for more than 12 months and still qualify for NMPA protection.

Protected pension age block transfers where the normal minimum pension age is increased from age 55 to 57 on 6th April 2028

A block transfer involving a protected pension age of 55 differs from traditional block transfer rules. From 4 November 2021, a protected pension age of 55 can be maintained on transfer where two or more members transfer all their rights from the same scheme to the same receiving scheme at the same time.

Unlike the traditional block transfer rules used for protected tax-free cash and other protected pension ages, there is no requirement for the member to have been in the receiving scheme for less than 12 months before the transfer takes place.

The rules for taking benefits after transfer  are also different in that there is no requirement for all the benefits in the scheme to come into payment at the same time. 

Where the conditions are satisfied, the protected pension age is applied at scheme level. Any existing benefits already held in the receiving scheme and any future contributions paid into that scheme can also benefit from the protected pension age of 55.

4) Scheme wind up

Where a scheme is winding up and the members' benefits are either transferred to a section 32 policy or assigned to the member directly, this will be treated the same as a block transfer and the protected benefits will be retained.

5) Block transfer scheme compatibility

This table shows which schemes are compatible with a block transfer, i.e. can have a transfer whilst retaining either protected tax-free cash or early retirement age.

6) Taking benefits after transfer

When you come to access the protected benefits, you can only do so if all benefits within the scheme come into payment at the same time. In other words, you must fully crystallise everything within the scheme.*

This means that if you already hold crystallised funds when you transfer in, you will not be able to meet this condition unless all the crystallised funds are withdrawn first.

For help with calculating the current value of scheme specific protected tax-free cash please use our calculator.

*Different rules apply for block transfers relating to the new higher minimum pension age of 57 for full details see our article "Normal Minimum Pension age- changes coming in 2028"

Approver: Quilter August 2026
Q 00530/206/18050