Transferring pension scheme to ISA of choice

Basic_Wager · 26 August 2016 at 10:29AM

I was auto enrolled into a pension scheme with Now Pensions. I have been working fir the same company for three years and receive a basic wage of 7.20 and work a 40 hr week, sometimes more.

I recently received correspondence from now pensions saying that I would receive 37p annually by the time I reach pension age. I will not get back what I have paid in.

Is it possible to transfer all the money I have so far invested into this crap scheme into an ISA of choice without being penalised? I really need to extract myself from this toxic scheme and start saving independently

How can I access help to do this?

neilvw · 27 August 2016 at 1:45PM

You cannot transfer a pension into an ISA. From age 55 (currently) you can cash in but beyond the 25% lump sum the proceeds are taxable.

The illustration will be in real terms, i.e inflation-adjusted, and may make conservative assumptions about pay rises (possibly assuming no pay rises). Typically assumptions about investment returns are now also quite conservative.

Your earnings are something around £15,000, perhaps a bit more, but let's assume £15,000 for now.

NOW Pensions charge a 30p/month administration fee for active members earning up to £18,000, and an annual management charge on the fund of 0.3%.

Assuming you and your employer pay the minimum, contributions total £15.29 a month gross.

Hard to see how even a pessimistic projection could produce an annuity figure of 37p a year!

How old are you? Have you been in the scheme for the full three years? What's the fund value?

In April 2018 the minimum paid in by you and your employer in total rises from 2% on a band of earnings to 5%, and then in April 2019 to 8%.

yeslek · 20 October 2016 at 4:00PM

am wondering the same thing as I would like to take control of my own pension pot (considering ISA) and was hoping to transfer what I've already auto-paid, to where I prefer

greenglide · 20 October 2016 at 4:55PM

you cannot transfer your pension to an ISA unless you are 55 or over. Since the withdrawal of the money from the pension will be taxable anyway why would you wish to do this? It is already in a tax sheltered environment anyway. You cannot, generally, withdraw money from an autoenrolled scheme without opting out of the scheme and the hassle generally isnt worth it.

Why do you want to "transfer what I've already auto-paid, to where I prefer"?

dunstonh · 31 October 2016 at 12:12AM

You would have been better off posting this in the main pension section. This sub-section doesnt get many posters.

I recently received correspondence from now pensions saying that I would receive 37p annually by the time I reach pension age. I will not get back what I have paid in.

I'm afraid you are misreading the information.

Projections are just examples using a range of assumptions. They are also converted into todays terms using an example inflation rate. They also use annuity rates at the lowest rates. They typically understate the likely outcome by quite a bit nowadays. Often they provide a paid up and an ongoing figure in the statement.

Is it possible to transfer all the money I have so far invested into this crap scheme into an ISA of choice without being penalised?

Pension beats ISA. So, you wouldnt want to do that.

I really need to extract myself from this toxic scheme and start saving independently

What you really need to do is learn about what you have before you make decisions that are quite foolish.

Transferring pension scheme to ISA of choice

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