Combine small SIPP back into workplace pension

[snotrag]

Have a fairly decent workplace pension from my current employer of 8 years. Salary sacrifice, starting to see some proper compounding effect, and plan to start bumping up my contributions even more. On target to give me roughly what I think I want when I want it.

However - I also have a small SIPP. I started this during COVID after using the 'lost pension' finder to dig out 3 very small, but existing pension pots I'd had with employers when I was in my 20's (and never really paid much attention). These were all pooled together and I opened a HL SIPP, and with some semi decent foresight, bought a bunch of shares in my current employer which had absolutely tanked when Covid hit. A smaller portion of it is sat in a few other funds.

My workplace pension will always be the long term conservative saving, this SIPP was a bit of a gamble with a pot of money that was effectively 'lost'.

Its turned out good, shares back where I'd expect, I've made a great %age gain on it in 5 years ish, and now it could be used as a one off payment into my workplace pension, boosting it by about 15%.

Being realistic, going forward I'm not one to be self managing and watching markets, buying any other individual shares etc. So I think I'm better off letting my actual managed pension do its thing, and other than any leaving/transfer fees from HL, theres not so much to lose.


Theres lot of advice on why you would start your own SIPP and its benefits - but not so much on doing this move I'm looking at.

Finally, how could I run some calculations on this? Various pension calculators are available, is it as simply as calculating combined income based on one big and one small pension pot, VS one big(ger) pension pot?

(To clarify - I am nowhere near, and never will be, in danger of hitting any maximum allowances of payments into my pension before getting taxed on it. I also benefit from a totally seperate company share save scheme which still allows me to benefit from company gains on a win or draw basis. Profict from this can also be used as lump sum payments into my pension if I wanted. )

Edited by snotrag on Thursday 13th February 12:30

[Rusty Old-Banger]

You are in almost exactly the same position as me, I would be very interested in hearing the answers.

[supersport]

Unless your workplace pension is a final salary, it will entirely depend on the funds you are holding. Generally I would have though a SIPP is easier to manage with a better pick of funds, but that depends on who the workplace / SIPP are with.

I have work place pensions and SIPPs. I pay the minimum to get matched funding for the workplace and pay most into my SIPP.

Colleagues do it the other way, max salary sacrifice and then do regular transfers out.

[Roger Irrelevant]

This should be very easy to do - I expect a matter of getting the requisite transfer out forms from HL, checking that your workplace scheme will accept a transfer in (which they almost certainly will do), and just doing it. The only thing that would stop me is if there is some daft exit fee to pay HL that will go away in the not-too-distant future, or if the fees on your workplace scheme are higher (seems unlikely). Other than that if you're happy for what is currently invested in your employer's shares to be invested in whatever is available in your workplace scheme it's got to make sense.

[Gin and Ultrasonic]

In terms of 'is this technically possible', then the answer is almost certainly yes.

Having your pensions in one place would certainly be easier to manage, and more convenient than having 2 pots. Things to consider:

Charges
What are the charges like in both plans? It's likely that your workplace pension will have lower charges than your SIPP, where if you are holding shares there can be an additional charge over simpler investments like in-house funds and cash. As a general rule, very large employers tend to negotiate better charge / discount terms for their workplace schemes than smaller companies.

Your workplace scheme may also have 'large fund discounts', when your charges decrease at certain levels - having all your investments in the workplace pension could move you to a cheaper charging tier.

Fund / investment variety
HL's investment choice is huge, and includes Shares, Funds, Cash and probably other stuff like Bonds/Gilts too.
Does your workplace pension give you all the investment choice you want/need for the future? Trust-based pensions, which tend to be popular with large employers tend to have more restricted investment options, whereas Group Personal Pensions can have a wider range of investments. Some workplace pension providers also offer the scope for individual members to go 'self-invested', usually with extra charges associated.

Default investment choice
It's always worth checking what this is, and if it is suitable for you. Many workplace schemes automatically invest you into a 'safe' option, and also make heavy use of 'Lifestyle Profiles' that tend to put you into lower risk investments the closer you get to retirement. These are really designed for people who want to buy an annuity at their retirement date, and NOT for anyone who plans to keep their funds invested and use Drawdown to raise income for many years after their normal retirement date.

[Wololo]

Here's why I'd keep the SIPP.

If you're in a position that you might receive a decent bonus, you might be tempted to smash a good chunk of it into your pension to avoid tax and accelerate your retirement plans.

If you do that using your employer's pension scheme it will likely be an absolute pain in the ass to prevent them from just sending it all out into the market the day they receive it. Personally I'd rather pay the cash into the market over time, and you can keep that control much more easily with a SIPP. Conversely the SIPP is a bit painful from a tax admin perspective so swings and roundabouts...