Dormant Pension - Leave Alone or Re-invest
Discussion
Firstly, I'll happily admit I'm a complete noob when it comes to this sort of thing
I've received my annual statement from a previous workplace pension which lists the transfer value at around £75k. There are zero contributions being made as I've moved employers and have a new pension to which both I and my employer contribute.
My question is what to do with the dormant funds. Is it possible to transfer this to another scheme that may (or may not) give better returns long term? Or is it best left as it stands just now?
I've received my annual statement from a previous workplace pension which lists the transfer value at around £75k. There are zero contributions being made as I've moved employers and have a new pension to which both I and my employer contribute.
My question is what to do with the dormant funds. Is it possible to transfer this to another scheme that may (or may not) give better returns long term? Or is it best left as it stands just now?
You'd need to know & evaluate some more details of your current pension before being able to decide if you should move it.
Is it a Defined Contribution or a Defined Benefit pension? A DB pension is difficult to move.
How is it performing?
What are the charges?
Are there any benefits attached? A spouse pension or a Guaranteed Minimum Pension are two examples of potentially valuable benefits
How long before it can be taken?
It's likely to be possible to move a DC pension elsewhere but you would need to know the answers to the above before anyone could offer suggestions on what to do.
Is it a Defined Contribution or a Defined Benefit pension? A DB pension is difficult to move.
How is it performing?
What are the charges?
Are there any benefits attached? A spouse pension or a Guaranteed Minimum Pension are two examples of potentially valuable benefits
How long before it can be taken?
It's likely to be possible to move a DC pension elsewhere but you would need to know the answers to the above before anyone could offer suggestions on what to do.
Mr Pointy said:
You'd need to know & evaluate some more details of your current pension before being able to decide if you should move it.
Is it a Defined Contribution or a Defined Benefit pension? A DB pension is difficult to move.
How is it performing?
What are the charges?
Are there any benefits attached? A spouse pension or a Guaranteed Minimum Pension are two examples of potentially valuable benefits
How long before it can be taken?
It's likely to be possible to move a DC pension elsewhere but you would need to know the answers to the above before anyone could offer suggestions on what to do.
Thanks for the info. I'm assuming it's a defined contribution pension, as there are no guaranteed benefits on maturityIs it a Defined Contribution or a Defined Benefit pension? A DB pension is difficult to move.
How is it performing?
What are the charges?
Are there any benefits attached? A spouse pension or a Guaranteed Minimum Pension are two examples of potentially valuable benefits
How long before it can be taken?
It's likely to be possible to move a DC pension elsewhere but you would need to know the answers to the above before anyone could offer suggestions on what to do.
I'll need to do a bit of research into performance and comparisons, charges etc
For that amount of money I would definitely speak to an IFA and look at your options
I had a number of small workplace pensions all of sub £5k value. When it came to it I consolidated them without any outside advice
I then, however, found out that I had an additional pot containing £25k (long story). I have spoken to somebody with better knowledge than me on the subject of combining all together to give me the best performance
I had a number of small workplace pensions all of sub £5k value. When it came to it I consolidated them without any outside advice
I then, however, found out that I had an additional pot containing £25k (long story). I have spoken to somebody with better knowledge than me on the subject of combining all together to give me the best performance
Dimebars said:
Thanks for the info. I'm assuming it's a defined contribution pension, as there are no guaranteed benefits on maturity
I'll need to do a bit of research into performance and comparisons, charges etc
A Defined Benefit pension doesn't mean that there are benefits on retirement it means that the pension amount is guaranteed no matter what happens, which makes it a highly desireable form of pension. A Defined Contribution pension can vary in value depending on the performance of the funds the pension funds are invested in. Because a DB pension is so advantageous there are very strict rules about moving out of such a scheme requiring you to take advice from someone who analyses the benefits & issues a recommndation for or against moving.I'll need to do a bit of research into performance and comparisons, charges etc
While it's impossible to advise on moving if you can find out which provider & funds the pension is invested in someone may be able to offer a view on them. You might also find the Intelligent Money sticky at the top of this forum to be a useful resource, although it's rather long now.
As the value is in excess of £30,000, there's a legal requirement that you will have to have obtained independent financial advice and to prove this to the transferring party before they can go ahead with your instructions to effect the transfer should you so decide.
Note that you do not have to follow the advice, just obtain it and prove you have done so.
You may have trouble finding an IFA whoi is prepared to give you the advice for what is a modest potential transfer amount. Many who in the past were prepared to give this advice have dropped out, mainly, I think, because of the dramatic increase in the cost of professional indeminity insurance if giving this advice.
R.
Note that you do not have to follow the advice, just obtain it and prove you have done so.
You may have trouble finding an IFA whoi is prepared to give you the advice for what is a modest potential transfer amount. Many who in the past were prepared to give this advice have dropped out, mainly, I think, because of the dramatic increase in the cost of professional indeminity insurance if giving this advice.
R.
Mr Pointy said:
Dimebars said:
Thanks for the info. I'm assuming it's a defined contribution pension, as there are no guaranteed benefits on maturity
I'll need to do a bit of research into performance and comparisons, charges etc
A Defined Benefit pension doesn't mean that there are benefits on retirement it means that the pension amount is guaranteed no matter what happens, which makes it a highly desireable form of pension. A Defined Contribution pension can vary in value depending on the performance of the funds the pension funds are invested in. Because a DB pension is so advantageous there are very strict rules about moving out of such a scheme requiring you to take advice from someone who analyses the benefits & issues a recommndation for or against moving.I'll need to do a bit of research into performance and comparisons, charges etc
While it's impossible to advise on moving if you can find out which provider & funds the pension is invested in someone may be able to offer a view on them. You might also find the Intelligent Money sticky at the top of this forum to be a useful resource, although it's rather long now.
This
You definitely need to KNOW what type of scheme is it
DB schemes offer a 'known amount' monthly upon retirement (like State pension or local government schemes), also known as "final salary schemes".
DC schemes essentially build up a pot that you can the manage when you reach the magic age to access them. Typically either through drawdown or buying annuities.
I had 3 smaller DC schemes I moved into my current work scheme (which is a low cost Aviva one). Moving them was a simple tak (made easier if the companies involved use "Origo Options" to work.
If I didn't have such a scheme to move them to, I would likely have used Intelligent Money - pop a question on their thread if you want some "free guidance" from Nik at IM. A decent honest bunch - he agreed the scheme I had was good enough to leave alone, but on the flip side, family members now have funds invested with them, so clearly we fell for the soft sell
Seriously, they have some simple to understand options that they can talk you through with zero pressure to do anything. Quite a refreshing organisation in the world of finance!
The Leaper said:
As the value is in excess of £30,000, there's a legal requirement that you will have to have obtained independent financial advice and to prove this to the transferring party before they can go ahead with your instructions to effect the transfer should you so decide.
Note that you do not have to follow the advice, just obtain it and prove you have done so.
You may have trouble finding an IFA whoi is prepared to give you the advice for what is a modest potential transfer amount. Many who in the past were prepared to give this advice have dropped out, mainly, I think, because of the dramatic increase in the cost of professional indeminity insurance if giving this advice.
R.
If it transpires the pot is a personal pension /defined contribution does that remove the 30k/advisor requirement?Note that you do not have to follow the advice, just obtain it and prove you have done so.
You may have trouble finding an IFA whoi is prepared to give you the advice for what is a modest potential transfer amount. Many who in the past were prepared to give this advice have dropped out, mainly, I think, because of the dramatic increase in the cost of professional indeminity insurance if giving this advice.
R.
deeb0 said:
If it transpires the pot is a personal pension /defined contribution does that remove the 30k/advisor requirement?
Yes, I moved a 50k SL DC pension to Intelligent money without advice. If it’s a straightforward 75k invested in funds you should easily be able to find out the performance and costs and see if it’s worth moving,I wouldn’t pay an IFA for that.
Dimebars said:
ellroy said:
There’s no requirement for advice unless the pension is over £30k AND it’s a Defined Benefit (Final Salary) scheme.
If it’s not you’re free to go.
ThanksIf it’s not you’re free to go.
Just need to assess what my best option is
Gassing Station | Finance | Top of Page | What's New | My Stuff