Pension transfers
Discussion
Between my wife and I we have 10 pensions, with values ranging from £5k - £30K, all of which are or were group pension plans.
Has anyone experienced transferring old pensions into their current employers schemes and if so what does it typically cost?
Although having them spread around multiple providers isn't a massive issue, we've only just turned 40 so but the time we retire we may have 20-30 separate schemes which seems absurd.
Has anyone experienced transferring old pensions into their current employers schemes and if so what does it typically cost?
Although having them spread around multiple providers isn't a massive issue, we've only just turned 40 so but the time we retire we may have 20-30 separate schemes which seems absurd.
A couple of thoughts (the transfers are relatively straightforward):
If any of your existing pension plans are 'With Profits' would any penalties on transfer (sometimes referred to Market Value Adjustment)?
Do any existing plans have guaranteed annuity rates as (I think) these are lost on transfer?
If unit linked make sure you check the fund value and transfer value as these can be different.
If any of your existing pension plans are 'With Profits' would any penalties on transfer (sometimes referred to Market Value Adjustment)?
Do any existing plans have guaranteed annuity rates as (I think) these are lost on transfer?
If unit linked make sure you check the fund value and transfer value as these can be different.
BS
The act of transferring is easy (in fact, the ombudsman made a landmark ruling today about it yesterday). Let's assume that your current occupational pension is suitable, transferring in to your workplace scheme might get you a slightly cheaper rate - I doubt it.
If your existing pension funds are doing badly, start with the basics - might something as simple as a fund switch help? If you consolidate them, you might have less paperwork and a unified strategy which is all very good blah blah, but you might lose strength through institutional diversity, possibly you'll creep over the FSCS threshold and you might not be able to take advantage of new legislation surrounding trivial pots.
If you transfer them into a personal pension away from your occupational scheme, you gain a little diversity but lose trivial pot assistance, and you possibly won't gain much in the way of fund rebates. Honestly, if you were my client, I'd probably be telling you to reflect and if the numbers make sense, suck up the admin hassle (if the existing pensions weren't in a stupidly expensive products) and instead of being annoyed at the different pots, think about how you could use new legislation to help you.
I accept though, that having 30 pots or so is taking the piss! Maybe no more than 3/4 if you wanted to capitalise on trivial pot legislation. Try and plan ahead - at 40, think about how you're going to extract your savings, not just grow them. Anyone under 40 will have to wait until 57 to draw a pension down (currently 55) - it's not that far away!
The act of transferring is easy (in fact, the ombudsman made a landmark ruling today about it yesterday). Let's assume that your current occupational pension is suitable, transferring in to your workplace scheme might get you a slightly cheaper rate - I doubt it.
If your existing pension funds are doing badly, start with the basics - might something as simple as a fund switch help? If you consolidate them, you might have less paperwork and a unified strategy which is all very good blah blah, but you might lose strength through institutional diversity, possibly you'll creep over the FSCS threshold and you might not be able to take advantage of new legislation surrounding trivial pots.
If you transfer them into a personal pension away from your occupational scheme, you gain a little diversity but lose trivial pot assistance, and you possibly won't gain much in the way of fund rebates. Honestly, if you were my client, I'd probably be telling you to reflect and if the numbers make sense, suck up the admin hassle (if the existing pensions weren't in a stupidly expensive products) and instead of being annoyed at the different pots, think about how you could use new legislation to help you.
I accept though, that having 30 pots or so is taking the piss! Maybe no more than 3/4 if you wanted to capitalise on trivial pot legislation. Try and plan ahead - at 40, think about how you're going to extract your savings, not just grow them. Anyone under 40 will have to wait until 57 to draw a pension down (currently 55) - it's not that far away!
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