Pensions - Are 2 pots better than one?

[pete_esp]

Hi all,

I'm now at a stage in life where I'm looking seriously at my financial future. I have 2 pension pots one from a previous employer and one with my current, they have roughly the same amount in each though I'm only contributing to my current employers scheme.

My question is, should I transfer the old pot into the new one or leave the old one where it is (Legal & General) or convert it to a SIPP so I can continue contributing to it out of my take home pay and claim the tax back or is there another option that I ought to consider?

Cheers,

Pete

[Mr Pointy]

Assuming it's a defined contribution pension then you need to find out how it's performing & does it have any valuable benefits attached. Then you can ask for a transfer value & assess if you can do better elsewhere.

[mikeiow]

Yup....I had a few 'small' pots a few years back from various jobs.........none of them had benefits, & none of them had shown signs of gaining much for previous years, so I moved them into my main one that was a big more 'managed'.
Easy to do.

Of course if they look like they are doing okay, then you can leave them alone: no harm in that either. Eggs & baskets, might work well!

[eliot]

Mr Pointy said:

Assuming it's a defined contribution pension then you need to find out how it's performing & does it have any valuable benefits attached. Then you can ask for a transfer value & assess if you can do better elsewhere.

What sort of valuable benefits should someone be looking for (3 pots, considering reducing to two or even one)

[Mattt]

It’s a question that nobody can answer based on the information you gave.

Look at the charges of each, some company schemes have very low charges and some are fairly high - sometimes they also increase if you have left the firm and are no longer an “active member”.

Once you’ve seen the charges, look at the underlying investments and compare performance to what you would be looking at in a SIPP.

[TwigtheWonderkid]

I have 3 pots, fortunately all with a considerable amount of money (in my world) in each. One seems to consistently out perform the other 2, but the other 2 aren't bad. I'm keeping all 3 pots. I think it offers me a bit more protection against market instability and bad investments by the companies involved. Especially with a no deal Brexit looming.

[Mr Pointy]

eliot said:

Mr Pointy said:

Assuming it's a defined contribution pension then you need to find out how it's performing & does it have any valuable benefits attached. Then you can ask for a transfer value & assess if you can do better elsewhere.

What sort of valuable benefits should someone be looking for (3 pots, considering reducing to two or even one)

Things like any guaranteed minimum pension or guaranteed annual increase (rare, though you might have them). Death benefits or widows pensions are another - some pay 50% to your widow if you die, yours may be different. Find out what happens if you both die - you may find the pension money you have paid in is lost to your estate which is one of the advantages of a personal pesion/SIPP.

[pete_esp]

Mr Pointy said:

Assuming it's a defined contribution pension then you need to find out how it's performing & does it have any valuable benefits attached. Then you can ask for a transfer value & assess if you can do better elsewhere.

Good point, I'll need to contact them and find out though I suspect all of the benefits expired when I left my previous employer.
I am a bit concerned about annual charges but it seems to have performed reasonably well considering it is a self managed one.

Been looking at the IM thread as well and the charges on that look favourable.