My pension options

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
6 replies 6.3K views
JerythJeryth Forumite
239 Posts
I would appreciate advice on what to do with my pension.

I'm female, 35, engaged to be married, and in good health apart from a back problem.

I started a personal pension through Lloyds Black Horse Finance in 1992 and contracted out of SERPS then. I did not want an occupational pension as I knew I would change jobs in the future. I also took out level term life assurance. I am going to cancel that, and join my husband to be in a joint life assurance policy.

I am not working right now, concentrating on getting my back problem under control so I can work again. When I start earning, I'm not likely to exceed 10K pa.

I'm fairly sure I need to contract back in to SERPS. I have never changed the amount I contribute.

Any ideas before I arrange an appointment with Black Horse to change the life assurance?

Thanks in advance. And please keep it simple else I won't understand.

Replies

  • dunstonhdunstonh Forumite
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    I did not want an occupational pension as I knew I would change jobs in the future.

    Bad decision. dont make that mistake again if the option occurs later in life.
    I'm fairly sure I need to contract back in to SERPS

    You have no earned income so you cannot contract in or out.
    Any ideas before I arrange an appointment with Black Horse to change the life assurance?

    Black Horse Financial Services was replaced a few years ago with LloydsTSB financial services and later with Scottish Widows.

    However, do not mistake scottish widows through lloydstsb with scottish widows through other sources. The products are not the same.

    Scottish Widows bank sourced products are more expensive than IFA/Direct priced products. i wouldnt recommend you doing anything though the bank.

    Most ex Black horse life pensions were repriced to match stakeholder terms a few years back. However, i have seen a number of these plans over the last year and although the terms show 1% annual charge, the projections are lower than stakeholder with 1% charge. As they no longer have a transfer penalty you could investigate moving the plan and contributions into a cheaper arrangement (subject to confirmation of charges on your plan in case its one of those that hasnt changed).
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • JerythJeryth Forumite
    239 Posts

    Bad decision.   dont make that mistake again if the option occurs later in life.
    I don't understand WHY that is a bad decision. I didn't want any frozen pensions. The last place I worked at was a charity which didn't offer an occupational pension anyway
    You have no earned income so you cannot contract in or out.
    I'm sorry, I'm confused. Do I have to get a job before I can change the situation?
    Black Horse Financial Services was replaced a few years ago with LloydsTSB financial services and later with Scottish Widows.

    However, do not mistake scottish widows through lloydstsb with scottish widows through other sources.  The products are not the same.

    Scottish Widows bank sourced products are more expensive than IFA/Direct priced products.  i wouldnt recommend you doing anything though the bank.

    Most ex Black horse life pensions were repriced to match stakeholder terms a few years back.  However, i have seen a number of these plans over the last year and although the terms show 1% annual charge, the projections are lower than stakeholder with 1% charge.  As they no longer have a transfer penalty you could investigate moving the plan and contributions into a cheaper arrangement (subject to confirmation of charges on your plan in case its one of those that hasnt changed).
    I'm so sorry, I don't understand what you have written above. Are you suggesting that I discontinue my current pension scheme?
  • dunstonhdunstonh Forumite
    106.8K Posts
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    Bad decision. dont make that mistake again if the option occurs later in life.


    I don't understand WHY that is a bad decision. I didn't want any frozen pensions. The last place I worked at was a charity which didn't offer an occupational pension anyway

    If you have an occupational pension scheme available, there is free money involved. If you stay beyond 2 years, most schemes will allow the benefits to be retained or you can transfer to the next scheme or another alternative. If you leave within 2 years, you get your money refunded and you can then pay that into a pension.

    When giving advice, it would be gross misselling to take out a personal pension instead of an occupational pension.
    You have no earned income so you cannot contract in or out.

    I'm sorry, I'm confused. Do I have to get a job before I can change the situation?

    As you have no earned income, there is no contracting out taking place. Once you have earned income you may decide to contract in or out then depending on your circumstances. The recent changes announced on contracting out (able to take tax free lump sum when contract out but not when contracting in) may mean you prefer to remain contract out. However, whilst you have no income, there isnt really a need to make that decision now.
    I'm so sorry, I don't understand what you have written above. Are you suggesting that I discontinue my current pension scheme?

    I suggest that you investigate ceasing the old Black Horse Life pension and investigate transfering to a stakeholder pension. I don't know your plan charges as i have no details on them. I can only comment on other Black Horse Life pensions i have seen which have allowed free transfers and higher charges than alternative modern plans. No one can say if it is right to transfer/cease yours until they see the details on the plan.

    Seeing someone from BHL/LTSB/Scot Wid is no good for you as they cant offer pension switching/transfer advice. That can only be offered by an IFA or if you decide to do it yourself.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • JerythJeryth Forumite
    239 Posts
    Thanks, DD for the clarification. I will look for an IFA when I am earning again. Much appreciated. :)
  • DarrylDarryl Forumite
    218 Posts
    Jeryth

    Hope the back problem heals soon, and good luck with the job hunting.

    When you do consult and IFA, make sure that you consult 2 or 3.

    And maybe post their suggestions back on this site so that we can (maybe) help you decode/decide what to do.

    Darryl.
    ... Fool's Gold ...
  • JerythJeryth Forumite
    239 Posts
    Sure will, thanks for the offer! Picked up some leaflets from the library about pensions (official Govt leaflets, tho), so I can try to educate myself a little before I see someone.
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