Have you combined your pensions?
Discussion
Is there a general consensus regarding combining old pensions?
I've got a couple of pensions around £100k plus a handful of smaller ones from previous jobs. It would be far more convenient for me to have one pension so that I can see the total value and get estimates on retirement values, etc.
Is it generally the best approach to combine all previous pensions into your current workplace pension, or is it more complicated then that?
I've got a couple of pensions around £100k plus a handful of smaller ones from previous jobs. It would be far more convenient for me to have one pension so that I can see the total value and get estimates on retirement values, etc.
Is it generally the best approach to combine all previous pensions into your current workplace pension, or is it more complicated then that?
If I could, I would. However the only two pensions I have that allow transfer in are historically the lowest performers so I have kept separate. It makes tax a bit more complicated (as in, which ones should be taxed at higher rate?), I’m resigned to sorting that out through my annual returns
Watching with interest for wisdom…
I’m about to do my annual check around the 5 pervious company and personal schemes I have. Lots of logins and sites to keep track of, and consolidating into a single account seems logical to me, from a drawdown a tax view, which is hopefully just a few years away.
I’m about to do my annual check around the 5 pervious company and personal schemes I have. Lots of logins and sites to keep track of, and consolidating into a single account seems logical to me, from a drawdown a tax view, which is hopefully just a few years away.
mikef said:
If I could, I would. However the only two pensions I have that allow transfer in are historically the lowest performers so I have kept separate. It makes tax a bit more complicated (as in, which ones should be taxed at higher rate?), I’m resigned to sorting that out through my annual returns
Ahh, I didn't consider that some transfers would not be allowed. I guess you try and set up the transfer and then the providers review the request to see if it is allowed? Or will it be stated in the pension documentation to see if transfers would be allowed? A couple of things to think about:
1) does your pension allow to control how it is invested, is it easily accessible to move your money into the funds you wish to invest in?
2) what are the platform and management fees e.g. annual % of investment?
I think work schemes are capped at a maximum 0.75% (needs to be confirmed, I'm not certain).
Generally the fewer schemes you have then the easier it is to keep track of them. If it's not a work scheme then the investment platform (e.g. Hargreaves L or Vanguard) may have caps on fees or lower %fee for bigger investments. This means if you lump them all together then you end up paying a lower annual fee.
Make sure there are no fees for transferring funds and look up the details about when you eventually take your pension. For example, the two mentioned above do not have exit fees.
I had an AVC pension with Standard Life at work and once I left my work company I transferred my pension out because the fees were lower while I was an employee but once I had left the company then the annual fees would have been higher.
In terms of accessibility, I found the Standard Life website a bit clumsy and more difficult to move funds. I am much happier with HL and Vanguard which have much more user friendly sites. Although these are not the cheapest around, they are still much cheaper than Standard Life.
1) does your pension allow to control how it is invested, is it easily accessible to move your money into the funds you wish to invest in?
2) what are the platform and management fees e.g. annual % of investment?
I think work schemes are capped at a maximum 0.75% (needs to be confirmed, I'm not certain).
Generally the fewer schemes you have then the easier it is to keep track of them. If it's not a work scheme then the investment platform (e.g. Hargreaves L or Vanguard) may have caps on fees or lower %fee for bigger investments. This means if you lump them all together then you end up paying a lower annual fee.
Make sure there are no fees for transferring funds and look up the details about when you eventually take your pension. For example, the two mentioned above do not have exit fees.
I had an AVC pension with Standard Life at work and once I left my work company I transferred my pension out because the fees were lower while I was an employee but once I had left the company then the annual fees would have been higher.
In terms of accessibility, I found the Standard Life website a bit clumsy and more difficult to move funds. I am much happier with HL and Vanguard which have much more user friendly sites. Although these are not the cheapest around, they are still much cheaper than Standard Life.
Might be worth considering the small pension exemption that allows you to take tax free up to 3 pensions of up to £10k
“Under contract-based pension arrangements such as your personal pensions, you can take up to three pension pots, each of no more than £10,000 in value as a small pot lump sum. Small pots aren’t tested against the lifetime allowance, which means they can reduce the eventual tax charge that may become due. “
“Under contract-based pension arrangements such as your personal pensions, you can take up to three pension pots, each of no more than £10,000 in value as a small pot lump sum. Small pots aren’t tested against the lifetime allowance, which means they can reduce the eventual tax charge that may become due. “
Kickstart said:
Might be worth considering the small pension exemption that allows you to take tax free up to 3 pensions of up to £10k
“Under contract-based pension arrangements such as your personal pensions, you can take up to three pension pots, each of no more than £10,000 in value as a small pot lump sum. Small pots aren’t tested against the lifetime allowance, which means they can reduce the eventual tax charge that may become due. “
This can be a useful thing to do if they are very small.“Under contract-based pension arrangements such as your personal pensions, you can take up to three pension pots, each of no more than £10,000 in value as a small pot lump sum. Small pots aren’t tested against the lifetime allowance, which means they can reduce the eventual tax charge that may become due. “
I did combine 3 small DC pensions (but over 10k) many years ago….all 3 had no guaranteed benefits, and all 3 were ‘treading water’ in terms of performance.
The one I moved them to was getting much more of my attention (& indeed cost less than the smaller one). Made sense to me.
If your smaller schemes are members of https://origo.com, the work involved to transfer them is pretty straightforward: I didn’t need a FA of any sort.
If the smaller ones are DB schemes and (I *think*) have a value over 30k, then you are obliged to take formal financial advice…..& most times, it wouldn’t make sense to move them anyway.
I combined all my DC pensions to one provider and created three "small pot" pensions at the same time with the single provider. At the time the lifetime allowance was a consideration and small pot pensions are not tested against the LTA.
Note however, they are not "tax free" as said above they just don't count to your LTA, which may no longer be a consideration anyway.
I consolidated them as a) I had a number of them scattered about; and b) the provider of my largest pension did not support flexible drawdown which was something I wanted. Before you move any pension do check whether it has any speific benefits that are restricted to that pension/provider which you might lose on moving.
Note however, they are not "tax free" as said above they just don't count to your LTA, which may no longer be a consideration anyway.
I consolidated them as a) I had a number of them scattered about; and b) the provider of my largest pension did not support flexible drawdown which was something I wanted. Before you move any pension do check whether it has any speific benefits that are restricted to that pension/provider which you might lose on moving.
Be careful combining pensions/consolidating into a new one if planning to retire or access money early.
Newer personal pensions have a retirement date restricted to 10years before state pension age, which would be 58 for me.
Some older pension funds have “protected pension ages” in them & can be accessible from 50/55.
Newer personal pensions have a retirement date restricted to 10years before state pension age, which would be 58 for me.
Some older pension funds have “protected pension ages” in them & can be accessible from 50/55.
Car bon said:
I consolidated mine into 2 - I didn't want all my eggs in one basket - but wanted things as simple as possible.
Similar approach here, so far have consolidated 3 old pensions into a single platform due to the lower platform and fund fees however intend to use a different platform when/if the times comes to transfer my current pension. I have 15 years at least till retirement so not thinking about it too much aside from picking the funds/ETF's and then ongoing monitoring and tweaking as and when needed.AndyAudi said:
Be careful combining pensions/consolidating into a new one if planning to retire or access money early.
Newer personal pensions have a retirement date restricted to 10years before state pension age, which would be 58 for me.
Some older pension funds have “protected pension ages” in them & can be accessible from 50/55.
This is the most important thing to be aware of in my opinion, as well as the cost of running the pension fund.Newer personal pensions have a retirement date restricted to 10years before state pension age, which would be 58 for me.
Some older pension funds have “protected pension ages” in them & can be accessible from 50/55.
I have a protected pension age on one of my pensions, and it feels like a golden goose compared to the others.
I've only had 3 employers during my career but thanks to various acquisitions had a number of pensions. When I moved to my current employer a year ago their pension provider offered a transfer service, they were brilliant. I provided all the details, they contacted all the other providers and gave me a summary of each that outlined any benefits I had.
It was super easy.
It was super easy.
Mr_J said:
I've only had 3 employers during my career but thanks to various acquisitions had a number of pensions. When I moved to my current employer a year ago their pension provider offered a transfer service, they were brilliant. I provided all the details, they contacted all the other providers and gave me a summary of each that outlined any benefits I had.
It was super easy.
Good to know. I’ve been enrolled into a Aviva plan, I’ll check with them.It was super easy.
I've consolidated mine into 3, down from 6 at one point, most of which were old work schemes. Now combined down into:
A SIPP which I set up, held with Fidelity
An ex-work one with Royal London, which just ticks over nicely
A current work one, with money in AJ Bell Passive MPS 5 fund
Just a bit easier to keep track of the overall valuations.
A SIPP which I set up, held with Fidelity
An ex-work one with Royal London, which just ticks over nicely
A current work one, with money in AJ Bell Passive MPS 5 fund
Just a bit easier to keep track of the overall valuations.
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