Where to get good pensions advice?

[breamster]

Hi,

I have a small selection of pensions that I have built up over the years from various different employers which I have quite competently neglected!

What I would like to do is ideally consolidate them down to one or two. I am concerned that the comparatively small sums in them are not being used effectively.

I'm not a financial guru, or a director and I don't have a goaty beard. Are there any simple steps I can do to work out what to do with them? Alternatively, can I pay someone for genuinely independent advice? How do I find such a person I can trust.

I did have someone look at them a little while ago who wanted £3k to consolidate them into one. I had no faith in him at all (and it seemed a bit(!) expensive) so I didn't go ahead.

Comments?

[bogie]

I did a similar exercise a few years back and my advisor costed it all up with the various providers and the fees to change were just not worth it for small amounts in the pots. Recommended course of action was just to leave them all and focus on paying into one pension from now on

No point paying hundreds of pounds in fees to transfer a few grand pot, you have just spent many years of any gains......

[timbo999]

Do remember that you can take small pension pots (less than £10k) as lump sums, but if you consolidate above that amount you won't be able to...

[Collectingbrass]

I got good advice and service (and reasonable fees) from http://www.chadneybulgin.com/ when I was looking at a Pension or Mortgage decision. I don't know them specifically on pensions as I went with a mortgage in the end, but I saw a few advisors at the time (Oct - Nov 2015) and they were the only ones who understood my question and concerns, didn't hard sell and most importantly gave off enough good vibes that I felt I could trust them.

[PurpleMoonlight]

timbo999 said:

Do remember that you can take small pension pots (less than £10k) as lump sums, but if you consolidate above that amount you won't be able to...

Yes you can, it's called flexi access drawdown.

[gd49]

breamster said:

I did have someone look at them a little while ago who wanted £3k to consolidate them into one. I had no faith in him at all (and it seemed a bit(!) expensive) so I didn't go ahead.

Comments?

If you just want to put them all in one place you don't need an IFA for that, you just need to contact each pension provider and fill out some paperwork to transfer them to whichever pension provider you want to use, did this myself earlier this year to transfer old pensions into my current employers pension provider.

[Ozzie Osmond]

breamster said:

Comments?

You haven't given any figures so it's very difficult to, especially in the context of that chunky £3,000k fee you mentioned.

PurpleMoonlight (above) has given you a pointer in a useful direction - SIPP with potential for flexible drawdown. You might find it useful to have a chat with an outfit like Hargreaves Lansdown who are quite into this sort of thing.
http://www.hl.co.uk/pensions/sipp

If you look at the fifth blue tick on this link you will see the magic words "simple consolidation process".

[PositronicRay]

I did a bit of both. Bonuses would be split 3 ways treat, pension, mortgage (not necessarily in that order)

To be mortgage free is great, it's a kind of "you can't touch me" if a boss is a bit of a dick or things aren't perfect at work. A superb feeling of confidence (like being young again)

Once mortgage was gone all, extra cash went into pension.

[ellroy]

I'd just comment on the fee.

£3k for the work, research required and ongoing advice as well as the risk a business takes on around pensions is actually not that much depending on the amounts involved.

[timbo999]

PurpleMoonlight said:

timbo999 said:

Do remember that you can take small pension pots (less than £10k) as lump sums, but if you consolidate above that amount you won't be able to...

Yes you can, it's called flexi access drawdown.

Good point. Apols I was making the assumption they were DB schemes and he was discussing consolidation into one DB scheme.

[breamster]

Hi All,

I have been googling a bit more. I've looked at Transfer values - some cost a bit to transfer out, some pay me to transfer out. Some have a Reduction in Yield figure as low as 1.1% some as high as 2.2%.

Think I am coming up with a plan to do it myself now - I think there is a sweet spot where I transfer out from a few pensions and keep a couple.

Bit of a minefield but I think I can suss it out without blowing £3K!

Thanks for the comments so far.

[russ_a]

I'm going through the same process at the moment.

Decided to open a SIPP with the Alliance Savings and then split the majority between two managed funds. The remainder will going into 4 stocks and a FTSE 250 Tracker.

What could go wrong!!

[Ozzie Osmond]

breamster said:

I think there is a sweet spot where I transfer out from a few pensions and keep a couple.

That's entirely possible as to be a good outcome, depending on exactly what you've got.

Two things to watch out for,

• It's rarely appropriate to transfer out of a Defined Benefit arrangement to a personal pension.
• On transferring any personal pensions, be careful you don't lose a "Guarantted Annuity Rate" on older arrangements.

[uk66fastback]

russ_a said:

I'm going through the same process at the moment.

Decided to open a SIPP with the Alliance Savings and then split the majority between two managed funds. The remainder will going into 4 stocks and a FTSE 250 Tracker.

What could go wrong!!

Four years in, what has the return been like

[mikeiow]

timbo999 said:

PurpleMoonlight said:

timbo999 said:

Do remember that you can take small pension pots (less than £10k) as lump sums, but if you consolidate above that amount you won't be able to...

Yes you can, it's called flexi access drawdown.

Good point. Apols I was making the assumption they were DB schemes and he was discussing consolidation into one DB scheme.

No, it’s not: FAD is a way of drawing down on a pension once you start taking money out. You can read more on that at https://www.pensionbee.com/pensions-explained/pens...

Pretty sure you are talking about “ trivial commutation.”, known as the “small pot rule” - see https://www.pensionsadvisoryservice.org.uk/about-p... for more detail.

Ozzie Osmond said:

That's entirely possible as to be a good outcome, depending on exactly what you've got.

Two things to watch out for,

• It's rarely appropriate to transfer out of a Defined Benefit arrangement to a personal pension.
• On transferring any personal pensions, be careful you don't lose a "Guarantted Annuity Rate" on older arrangements.

This!

You should be able to find out very easily whether these are DB or DC schemes - have a read around https://www.pensionsadvisoryservice.org.uk/about-p... if you the difference.
IF they are DC schemes, and you decide you want to consolidate them, it might make sense to add them into your “live” work scheme....if that one is being well managed with low costs.

The cost of moving them should be zero, which in your case could mean £3k being invested in you instead of a financial advisor. You can do it yourself very easily: I did 3 of my old ones over the past couple of years - mine were languishing in pretty average funds & because they were small I wasn’t paying them attention, better they were part of my main “pot”.

Personally, I would hop over to the IM sticker thread and have a chat with Nik.
IM also offer pensions.
Fact is I’ve helped both our “kids” and MrsMikeIOW open up pensions with them over the past year (non-earners can take advantage of paying up to £2,880 pa into a pension and gain from government adding money)
Nik doesn’t muck about or tell porkies - IM are a decent bunch all round - and my work one through Aviva is pretty decent so that one has stayed put ....for now!

Oh, & talking with Nik costs nothing. No, he will not offer “advice”.......but will give you pretty good “guidance” - all a legal thing - which in my view was as good if not better

Edited by mikeiow on Thursday 27th February 05:49

Edited by mikeiow on Thursday 27th February 05:51

[mikeiow]

russ_a said:

I'm going through the same process at the moment.

Decided to open a SIPP with the Alliance Savings and then split the majority between two managed funds. The remainder will going into 4 stocks and a FTSE 250 Tracker.

What could go wrong!!

Just reminded me: so we all know the FTSE 100 is the top 100 companies on the index (ie, with the highest market capitalisation).
....& the FTSE 350 is the top 350 with the highest market capitalisation....

I only learned a year or so back that the FTSE 250 is NOT the top 250....but the 101st to 350th
So, russ_a.....did you mean to chose the 250?!

[uk66fastback]

Good couple of replies Mike. I did a search on PH yesterday and found this thread. I've been a beneficiary of the recent sale of Equitable Life to Utmost. My fund languished in a dormant state from circa 1998 until now - I started another pension with Aviva in 2001 - and that is doing relatively okay currently - so I'm going to leave that one.

Bu the big uplift in the pension pot value courtesy of the Utmost purchase and my wish to take the 25% tax-free means I have to move it from Utmost I think and invest in something else.

I was talking to someone recently about a Fixed-term Annuity but the return over the next 10 years until I aim to retire was pretty dire.

I'll head over to the Intelligent Money thread and have a read of that - i started at some ungodly hour last night and it looked to be pretty informative ...

What's the general rough concensus of what I should be doing with this Utmost pot? The flexi-drawdown option looks attractive - I can't see myself taking anything out in the next decade while still working (but I know you can do that as and when you want) ...

[mikeiow]

Do lookup the MPAA (eg https://www.moneyadviceservice.org.uk/en/articles/...
You can take your tax free lump sum (TFLS) which is up to 25% of the pot in question....but as soon as you take a penny more, you limit how much you can pay in to the MPAA limit (currently max £4K pa)
This would including using FAD.

BTW, there is also a specific Pensions chat board on the Martin Lewis Moneysavingexpert forums which can be pretty helpful, I find

[henrycrun]

Just seeking clarification on the over 55's taking a lump sum -
as I understand, ANY amount taken out will be 25% tax free and 75% income tax.

https://www.which.co.uk/money/pensions-and-retirem...

[uk66fastback]

Jasey_ said:

henrycrun said:

Just seeking clarification on the over 55's taking a lump sum -
as I understand, ANY amount taken out will be 25% tax free and 75% income tax.

https://www.which.co.uk/money/pensions-and-retirem...

If you just take your "55 years old lump sum" you can take 25% of your pension pot as a tax free lump sum.

You can then leave the rest invested in your pension.

It's all very complicated after that

Edited by Jasey_ on Thursday 27th February 23:02

See, I don't think it is just as simple as 'leaving the rest invested in your pension'. I thought if you touched the pot and took your 25% tax-free, you then had to buy some other financial product with the money remaining ... be it an annuity or something.

Edit: some pension providers let you take the 25% I think, other's don't and you then have to look around for a new fund / scheme.

Edited by uk66fastback on Thursday 27th February 23:56

Edit to the edit!:

Am I right in thinking you can take a lump sum AND keep the pension going with the same provider but that the lump sum is subject to tax? So 25/75 etc.

And it's only if you want 25% tax free that you have to buy an annuity or flexi-drawdown product and can't have a 'normal' pension ...

?

Edited by uk66fastback on Friday 28th February 00:19