Dusty HSBC Grouped Personal Pension

Alleycat

Hi,

I hope some of you can advise/help me with the following as I really know very little about this sort of thing.......

Back in 2000 I worked for a brief period of time for a friend's company (very small, not overly welll run show). The MD decided to try and be a 'proper' company and set up a pension scheme for us, which was an HSBC Grouped Personal Pension Plan. Being a fresh faced graduate, I knew nothing about pensions and just thought "oh, pension, I'll be needing one of those" and paid into it. Unfortunately I was made redundant, and kind of forgot all about it until recently when sorting out some old paperwork.

Well, I've been in contact with HSBC and been told that there is a value of £210.35 with NI contributions of £695.48. I know its not a great deal of money, but I now need to decide what to do with it. The guy I spoke to on the phone gave me a very brief outline of my options and is arranging for me to speak to one of their pension managers to discuss in further detail. I have been assured they won't give me the hard sell, but am still wary!

The options given are:

1) Do nothing (apparently this is a stupid thing to do, the guy on the phone said)

2) Re-start payments into it (I can't really afford this at the moment and if I did choose this option it would only be a couple of quid a month).

3) Transfer to another pension scheme (I currently have a government pension scheme which I pay into and have had running for the past two odd years).

Thanking you all in advance!

Alley

EdInvestor

Hello Alley

What fund(s) is the money invested in and what charges are you paying on the pension?

dunstonh

I have been assured they won't give me the hard sell, but am still wary!

It's a bank. Banks are only interested in sales. They are not interested in your long term welfare.

1) Do nothing (apparently this is a stupid thing to do, the guy on the phone said)

Doing nothing for the rest of your life means you will earn about £4600 a year (in todays terms) in retirement. Whether you decide thats enough or not is your choice. Virtually everyone will say its not enough and doing nothing is foolish.

2) Re-start payments into it (I can't really afford this at the moment and if I did choose this option it would only be a couple of quid a month).

Hardly worth it unless you are looking towards contributions of around 5-15% of your salary.

3) Transfer to another pension scheme (I currently have a government pension scheme which I pay into and have had running for the past two odd years).

This bit should have been mentioned higher up as it basically invalidates all other points. Depending on which of the Civil Service schemes you are in, you may end up finding that there is no need for any other pension arrangement as this will be enough. Therefore just building up a lump sum savings would be more appropriate.

Transferring into the scheme is a valid option and may be the best one depending on what the occupational scheme give you for the amount of the transfer.

Although we cannot give advice here, if the HSBC tied agent suggests you pay into the personal pension, then walk away.

EdInvestor

This bit should have been mentioned higher up as it basically invalidates all other points. Depending on which of the Civil Service schemes you are in, you may end up finding that there is no need for any other pension arrangement as this will be enough. Therefore just building up a lump sum savings would be more appropriate.

Indeed. However meanwhile he has this bit of money in the pension which he can't get out so the OP might as well put it in the likely best performing fund and check he's on the lowest charging option so that it's worth as much as possible when he's finally old enough to get some advantage from it at 55.