Pension advice required please
Discussion
Between 2000 and 2009 I had been paying into a company stakeholder pension which was frozen when the company was taken over. Since then the new company formation started their own stakeholder scheme and I started to pay into that.
I have now received a letter from the newer scheme managers stating that the original company that managed the previous company's stakeholder are winding down their pension service. The new company are asking me if I want the old scheme's funds to be transfered to my current scheme or will I arrange a transfer elswhere.
I do not know what to do, should I add to my current scheme or use it to create another pot somewhere else?
I have no idea what the current value is but paid in about £250 a month during its lifetime.
Any advice appreciated as I am crap at this type of stuff!
Thanks
It is very unlikely that the first stakeholder pension is actually frozen. For sure, there's no money going into it but it is likely that the assets remain actively managed so will go up and down with the asset class(s) in which they are invested. So, being frozen should not be the sole reason to want to transfer elsewhere.
You refer to two options: transfer to the new stakeholder, or elsewhere which will be another pernsion arrangement that you could set up yourself. Is there a third option: leave the original stakeholder where it is? This could be the best option in the sense of simplicity and no loss of asset value on transfer. There's no reason why you should have all your pensions in one place.
Crucially, you need to find out the stakeholder value AND the transfer value: they may not be the same amounts. You can then see what the "penalty" will be for effecting the transfer.
Ideally, you should compare the key features of the original stakeholder deal and any that you may transfer assets to, although if both are stakeholder plans there should be little difference.
I ought to say too that I cannot give you any personal advice here, only general observations.
You could/should always get the advice of an independent financial adviser although this will cost you....maybe your employer is offering such a facility at their cost..... which is often the case for employer inspired changes like this.
R.
You refer to two options: transfer to the new stakeholder, or elsewhere which will be another pernsion arrangement that you could set up yourself. Is there a third option: leave the original stakeholder where it is? This could be the best option in the sense of simplicity and no loss of asset value on transfer. There's no reason why you should have all your pensions in one place.
Crucially, you need to find out the stakeholder value AND the transfer value: they may not be the same amounts. You can then see what the "penalty" will be for effecting the transfer.
Ideally, you should compare the key features of the original stakeholder deal and any that you may transfer assets to, although if both are stakeholder plans there should be little difference.
I ought to say too that I cannot give you any personal advice here, only general observations.
You could/should always get the advice of an independent financial adviser although this will cost you....maybe your employer is offering such a facility at their cost..... which is often the case for employer inspired changes like this.
R.
The Leaper said:
Crucially, you need to find out the stakeholder value AND the transfer value: they may not be the same amounts. You can then see what the "penalty" will be for effecting the transfer.
Just one point of clarity for you, if its a stakeholder, the amounts will be the same. Its one of the rules applying to such contracts. I think the point here is: get some proper advice.
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