Consolidating pensions - should I ?
Discussion
At present I have
1 DB pension (I'll leave that out of this for now)
1 DC Standard life (closed)
2 x DC L&G Workplace (1 of these is closed, the other one current)
I'm thinking that the admin will be simpler and performance easier to track if I consolidate all of the DC's into my single current workplace pension.
Obviously there is some gamble to this, i.e. that the investment performance on the current one isn't significantly worse that the closed ones, but other than that I can't see a downside to consolidating.
Am I missing anything before I action this ? Not sure if it helps, but I'm 49, likely to contribute for c.6 years more if my plan works...
1 DB pension (I'll leave that out of this for now)
1 DC Standard life (closed)
2 x DC L&G Workplace (1 of these is closed, the other one current)
I'm thinking that the admin will be simpler and performance easier to track if I consolidate all of the DC's into my single current workplace pension.
Obviously there is some gamble to this, i.e. that the investment performance on the current one isn't significantly worse that the closed ones, but other than that I can't see a downside to consolidating.
Am I missing anything before I action this ? Not sure if it helps, but I'm 49, likely to contribute for c.6 years more if my plan works...
I'm in a similar situation to you (DB + legacy DC + current DC) but not able (without taking advice) to transfer the legacy DC because it comes with the useful ability to take DB tax free cash from it.
As worsy said, check for any rights you'd be giving up and compare the platform and fund fees if any.
It's important is to check whether the choice of funds available on the target scheme is the right one for you now and in the future. That way, there should be no gamble. Fund choices on DC schemes are generally very limited compared to what is offered by SIPP platforms even if you want something fairly standard.
You mentioned comparing investment performance, but you can only do a meaningful comparison if you are comparing like with like.
If you're not sure which investments are right for you then work this out before doing the transfer.
As worsy said, check for any rights you'd be giving up and compare the platform and fund fees if any.
It's important is to check whether the choice of funds available on the target scheme is the right one for you now and in the future. That way, there should be no gamble. Fund choices on DC schemes are generally very limited compared to what is offered by SIPP platforms even if you want something fairly standard.
You mentioned comparing investment performance, but you can only do a meaningful comparison if you are comparing like with like.
If you're not sure which investments are right for you then work this out before doing the transfer.
AyBee said:
What admin do you have? I have 3 currently, 2 of them I just check in on occasionally and the current one gets a bit more attention because it's current. Not sure I'm too bothered to shift them all into one though and treat them as a bit of diversification.
That's a fair point, I've now sorted online access so I can just check in as and when on them.Quite a few considerations form the contributors here (Thanks all) so I'm going to sit tight for now..
I retired from my job in 2021 but had already transferred out both a DB and a DC ( MPS ) scheme.
Ignoring the benefits of the former in transferring I also wanted to have sight of the investments and better control- perceived or otherwise.
The funds in the DC scheme were already being switched to a company scheme manager that I wasn’t enamoured with so was able to pretty much replicate the type of fund and composition elsewhere.
The costs of this are also less to me than previous.
To a lesser degree I was also slightly concerned at the overall finances of the company I was working for and also the potential shortfall of any Pension funding.
Both “ pots “ are still entirely separate with different Funds but I can see them in one place daily if I were so minded although for the previous DC scheme I could also do this if I wished.
Ignoring the benefits of the former in transferring I also wanted to have sight of the investments and better control- perceived or otherwise.
The funds in the DC scheme were already being switched to a company scheme manager that I wasn’t enamoured with so was able to pretty much replicate the type of fund and composition elsewhere.
The costs of this are also less to me than previous.
To a lesser degree I was also slightly concerned at the overall finances of the company I was working for and also the potential shortfall of any Pension funding.
Both “ pots “ are still entirely separate with different Funds but I can see them in one place daily if I were so minded although for the previous DC scheme I could also do this if I wished.
I consolidated/transferred 3 old employer DC pensions into a SIPP, circa 80% is invested into a single Vanguard Global Equities ETF and then rest in a few satellite funds. My main drivers at the time were the poor fund options/high fund charges in one of my DC pots and an employer-discount on my SIPP. If you are reasonably happy with performance and the charges being paid then there is no real need to transfer.
When/If I leave my current employer the plan is not to consolidate the current DC pot (untill necessary) to retain some diversification both at a platform level and fund providers i.e: not to concentrate all my pension funds with Vanguard.
When/If I leave my current employer the plan is not to consolidate the current DC pot (untill necessary) to retain some diversification both at a platform level and fund providers i.e: not to concentrate all my pension funds with Vanguard.
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