Pension Juggling and Leaving Employment

[Vanity Projects]

I’m entering my third career now (yes, as a company director, etc) and I’m mulling what to do with my old employers DC pot.

I have a final salary scheme that I’m leaving untouched from my first employer but my DC scheme has a six figure chunk in there that I’d like more control over.

My old DC scheme was administered by L&G and allowed trading around a very limited range of funds but not the flexibility of a sipp to trade UK and US shares that I can now have as the employer sent putting their 12% in anymore to make it worth keeping there.

My new employment also has a dc scheme but it’s only employee 4%/3% employer but either way, it gives me some leeway to play around a bit with my old DC pot.

I’m early 40’s so plenty of time to keep topping up so my question is?

If I move it into a sipp is the max cover for the scheme going bang £85k per provider and therefore my whole pension wouldn’t be covered unless I split it across a few providers?

What have others done?

Leaving it with L&G and moving around the odd fund is an option but a bit boring and limits more speculative exposure that I’m fully prepared for.

[Burwood]

Vanity Projects said:

I’m entering my third career now (yes, as a company director, etc) and I’m mulling what to do with my old employers DC pot.

I have a final salary scheme that I’m leaving untouched from my first employer but my DC scheme has a six figure chunk in there that I’d like more control over.

My old DC scheme was administered by L&G and allowed trading around a very limited range of funds but not the flexibility of a sipp to trade UK and US shares that I can now have as the employer sent putting their 12% in anymore to make it worth keeping there.

My new employment also has a dc scheme but it’s only employee 4%/3% employer but either way, it gives me some leeway to play around a bit with my old DC pot.

I’m early 40’s so plenty of time to keep topping up so my question is?

If I move it into a sipp is the max cover for the scheme going bang £85k per provider and therefore my whole pension wouldn’t be covered unless I split it across a few providers?

What have others done?

Leaving it with L&G and moving around the odd fund is an option but a bit boring and limits more speculative exposure that I’m fully prepared for.

You are protected up to £85K in the event your provider goes bust. You mentioned the scheme. If the asset was eroded that's not the same thing. Also bear in mind that a provider ring fences your assets. Even if asset manager X went bust the assets are still yours.

[Vanity Projects]

Burwood said:

You are protected up to £85K in the event your provider goes bust. You mentioned the scheme. If the asset was eroded that's not the same thing. Also bear in mind that a provider ring fences your assets. Even if asset manager X went bust the assets are still yours.

Ah, thank you - mini eureka moment there, so actually I can carry on transferring it to one sipp provider as the assets are separate from their own operation. Just me tallynhadnt clicked for some reason.

Should I choose to back a two legged racehorse of a fund/stick to zero that’s on my head and I’m fine with that bit, hence the moving to a sipp.

[VR99]

I am a similar-ish age to you OP and have two DC pensions, one is an old employer scheme and the other is my current that is still receiving contributions. If and when I move jobs again, plan to transfer.both into a SIPP and combine the two. As I already use Vanguard for my S&SISA then my only rule of thumb is to use a provider/fund combination that is not Vanguard. It's probably overkill but will help me sleep better at night.

[Vanity Projects]

VR99 said:

I am a similar-ish age to you OP and have two DC pensions, one is an old employer scheme and the other is my current that is still receiving contributions. If and when I move jobs again, plan to transfer.both into a SIPP and combine the two. As I already use Vanguard for my S&SISA then my only rule of thumb is to use a provider/fund combination that is not Vanguard. It's probably overkill but will help me sleep better at night.

Yes, similar here, wife has her sipp with IM, LISA with AJ Bell. I’m moving my sipp to ii so I can trade a good range of US stocks, and by trade, I largely mean buy and hold - a good way to ruin a pot is to trade it to death.

I wanted a smattering of crypto exposure in there so can do it by proxy in a few places that ways.

[cavey76]

Similar position to the OP. Had three legacy DC schemes, £80K, then £10K, then £30k. The smaller second and third were “active” in the sense that they were employer/employee contributions while i was actively employed in each company. I started with moving the original largest sum to AJBell/YouInvest. I specifically chose them because I wanted access to the ASX, for a specific stock i wanted. Otherwise i might well have settled with HL or any other well regarded SIPP provider.

I now actively manage them in AJ, after moving the later smaller pots in. AJ is simple, great app, imho and fairly pain free when i migrate another pot in to them. I only have issues if tge DC scheme i am leaving get obtuse about whats needed to move a pot. Worse case has been a couple of emails specifying i want shares sold and cash transferred.

I am employed again with a fourth DC scheme - if i move on, within a month or so i will pop over to AJ website, enter approx value and acc # and expect it to migrate across pain free.

Over about 7 years i have got the above to a pretty decent place for a guy in his mid 40s and just find AJ pain free to use.

[anonymous-user]

I thought the £85,000 was just bank deposits. Isn't the SIPP itself covered under the FSCS?

[mike9009]

Rufus Stone said:

I thought the £85,000 was just bank deposits. Isn't the SIPP itself covered under the FSCS?

That was my understanding. Otherwise I need to start splitting the two pensions I have with more providers...

[bogie]

Rufus Stone said:

I thought the £85,000 was just bank deposits. Isn't the SIPP itself covered under the FSCS?

Yes exactly ...SIPP assets are usually held in a trust and separate from the providers business. No need to worry about £85k limits

[Vanity Projects]

bogie said:

Yes exactly ...SIPP assets are usually held in a trust and separate from the providers business. No need to worry about £85k limits

That was essentially my question as I’ve never had to think about it before, 13 years in a DB scheme and another 11 years in DC, never had to understand moving them out.

[Burwood]

bogie said:

Rufus Stone said:

I thought the £85,000 was just bank deposits. Isn't the SIPP itself covered under the FSCS?

Yes exactly ...SIPP assets are usually held in a trust and separate from the providers business. No need to worry about £85k limits

Correct. And to Rufus above, no the £85K limit does not just apply to Bank deposits. It applies to a wide range of authorised financial services including mortgages, insurance, pensions, banks, PPI, debt management. But as has already been said, if you hold a stock/asset if will be safe in that you still hold it regardless of the provider going bust. If Fidelity, Vanguard, Fundsmith went pop, your investments are safe.