Pension question

[CAPP0]

I'm in my 50s and have 4 employer pensions of varying sizes, amassed over my working life. Since the age of 18 I've paid into a pension every year of my working life with the exception of a short break of a couple of years about 15 years ago. Those employer pensions have all performed differently but of course have all suffered from the current financial markets.

I've been self-employed for about a year, and am about to accept an offer of a salaried role which includes a (smallish) pension. I have a small sum put aside from the last year for pension purposes (<10k) and I'm not sure what to do with it. I don't believe I can add it to any of the existing pensions as I'm no longer employed by any of those companies. Should I drop it into the new company pension (assuming I am able to do so) as a lump sum, or is there something better I can do with it?

Thanks.

[edc]

CAPP0 said:

I'm in my 50s and have 4 employer pensions of varying sizes, amassed over my working life. Since the age of 18 I've paid into a pension every year of my working life with the exception of a short break of a couple of years about 15 years ago. Those employer pensions have all performed differently but of course have all suffered from the current financial markets.

I've been self-employed for about a year, and am about to accept an offer of a salaried role which includes a (smallish) pension. I have a small sum put aside from the last year for pension purposes (<10k) and I'm not sure what to do with it. I don't believe I can add it to any of the existing pensions as I'm no longer employed by any of those companies. Should I drop it into the new company pension (assuming I am able to do so) as a lump sum, or is there something better I can do with it?

Thanks.

There is nothing to stop you from having an additional personal pension plan. You can do this via a SIPP too.However, if your new company pension scheme allows you to increase your contribution or make one off or monthly fixed additional contributions then you could invest it that way too.

You should or would make this additional contribution from your salary so will benefit from the tax relief. You can the also claim any higher rate tax relief.

With regards your other pension pots you should check their trends and fund performance, check the AMC, check the charges to move out or in the funds, then you are in a better position to see whether you should consolidate. If any of them are final salary then in all likelihood you should make no change to those.

[CAPP0]

Thank you, that's really useful, and much appreciated. Pensions are something of a dark art to me! I'll definitely look into those.

[edc]

No problem.

Pensions escapes most people. You would be surprised by the number of employees that approach me who have been paying into a company pension scheme for months or years and say "I don't understand how pensions work" or have no clue how or where their contributions are invested. Lots of people go for the default fund without thinking about it.

[Corpulent Tosser]

Can you not move your old company pensions into a single private pension scheme and put your 10K in with them ?

I know when I was with a company for some years, I took professional advice and it was on what to do with my pension, the advise was to stay with the company pension so long as I worked for the company, but move it to a private pension if I ever left, which I did.

Current advise may of course be different, this was quite a number of years ago, so I would say - Ask an independent adviser.

[ChasW]

Corpulent Tosser said:

Can you not move your old company pensions into a single private pension scheme and put your 10K in with them ?

I know when I was with a company for some years, I took professional advice and it was on what to do with my pension, the advise was to stay with the company pension so long as I worked for the company, but move it to a private pension if I ever left, which I did.

Current advise may of course be different, this was quite a number of years ago, so I would say - Ask an independent adviser.

Absolutely agree with the emphasis being on professional and independent advice. I am pretty numerate with a head for detail but these pension companies lose me quickly. I have checked the merits of leaving things a they are a couple of times and have just got my head around the mechanics of it all.

[Ms R.Saucy]

Corpulent Tosser said:

Can you not move your old company pensions into a single private pension scheme and put your 10K in with them ?

I know when I was with a company for some years, I took professional advice and it was on what to do with my pension, the advise was to stay with the company pension so long as I worked for the company, but move it to a private pension if I ever left, which I did.

Current advise may of course be different, this was quite a number of years ago, so I would say - Ask an independent adviser.

This does depend on what the old pensions are as moving defined benefit stuff is hard and/or inadvisable - and in the case of the PAYG government schemes can't be done

I think you are spot on recommending the OP gets proper professional advice

Edited by Ms R.Saucy on Monday 9th January 17:11

[CAPP0]

Thanks, I have had someone recommended to me over the weekend. Asked my existing pension providers for an up to date statement and I'll sit down with this guy once I have those.

[ChasW]

It would be worth looking at this carefully and possibly taking advice if you are thinking of transferring. My brother recently transferred one of his defined benefit pensions and I was staggered by what he was offered. So if any of your previous schemes are final salary they could worth quite a lot notionally. Another reason is lifetime allowance which is now £1m. If it turns out that you are in the very fortunate position that the value of your pots combined is over £1m you can apply for protection at a higher level, £1.25m.