Maintaining 2 separate Pension Funds - any benefits?

[sparks85]

Hi all,


I currently have two small pensions running in parallel, one from each of my last two permanent jobs.

I intend to make a Employer contribution this FY (Ltd Co contractor).

Whilst I don't want to get bogged down in the specific pension products, is there any benefit or negative associated with maintaining two separate pensions split approx 50:50?

I believe there is a limit of £50k protection from the Government (FSA?) per SIPP..?

I realise the answer will probably be to speak to an IFA but I just want to gauge if this is generally a good or flawed idea.

Any assistance gratefully received.

[ellroy]

Too little information to be certain.

Minimum fees per pension could mean you're paying more than you need to though. However, to move providers will also have costs.

Replication of underlying assets could mean you are inadvertently taking in more risk than you want.

The list of possible issues goes on! Speak to an IFA!

[sparks85]

ellroy said:

Speak to an IFA!

I knew it!

Thanks for the response.

[Claudia Skies]

Very little to add to ellroy's comments above above.

If you're lucky enough to be in a Final Salary scheme one thing to watch out for is the way tax-free cash works. Typically "scheme AVCs" can be used towards your tax-free cash. On the other hand a separate private AVC/SIPP generally can't.

In other words, a scheme AVC might effectively come out as 100% tax-free cash. A separate AVC/SIPP will never go over 25% tax-free cash.

[Ginge R]

sparks85 said:

Hi all,


I currently have two small pensions running in parallel, one from each of my last two permanent jobs.

I intend to make a Employer contribution this FY (Ltd Co contractor).

Whilst I don't want to get bogged down in the specific pension products, is there any benefit or negative associated with maintaining two separate pensions split approx 50:50?

I believe there is a limit of £50k protection from the Government (FSA?) per SIPP..?

I realise the answer will probably be to speak to an IFA but I just want to gauge if this is generally a good or flawed idea.

Any assistance gratefully received.

If they're small, I'd probably consider two things. Do you intend to capitalise on trivial pot legislation at some point in the future or do you want the simplicity of just one provider/strategy.