Transferring Final Salary into another Final Salary - or not?

CJG_3

Firstly, hello all.

I have recently joined a new company [2 months] and was with my previous employer for 5 years, building up a good final salary pension with them. I now have the option of transferring this into my new company's final salary pension, but am unsure, with all the talk/hysteria about pensions these days - I don't know if I'd be better to take my previous pension money and stick it in an ISA or another account, and add to it personally. I'm automatically in my new works pension anyway, so that has been generating since I started - i'm just worried about transferring a good hefty amount into it, then losing it in a few years?

Any advice would be great thanks.

crossleydd42

You could either transfer the prodeeds of the old scheme into the new, but that isn't always the best idea. Cashing it in isn't an option. I suggest you merely leave it there to accumulate over the years - it will go up with inflation - and draw on it when you reach retiring age.

NAR

Welcome CJG.
You are right to be wary and ask questions. What you need to do is some research on your current employers scheme; ie find out what state it currently is in - is there a shortfall in the pension fund currently etc. Ask colleagues do they know of any reason why you shouldn't transfer into it.
It is only then that you will be able to make an informed decision to transfer your other funds or not.

Pal

Get a quote from both schemes as to what your benefits are worth currently and what they would be worth if you transferred. Compare the two options.


Speak to an IFA if you don't know how to do the comparison.

CJG_3

Thanks a lot for the advice guys.
Might have a quick chat with a IFA.

dunstonh

but am unsure, with all the talk/hysteria about pensions these days - I don't know if I'd be better to take my previous pension money and stick it in an ISA

The media are rubbish at reporting on financial services. Pensions get all sorts of bad media. Most of it is incorrect or relates to minority issues with certain plans but is presented as a problem for everyone.

From an investment point of view, the same funds are available in pensions as they are with ISAs. So when you get someone say that they are going to invest in an ISA instead of a pension because the pension isnt performing well, they have been totally misled and have misundertood the issues. You havent quite said that but you have suggested an ISA as an alternative because of pension hysteria.

darktrader

Easy answer.

Seek the professional advice of an IFA. There are so many imponderables that individual, personal advice based on ALL of your personal circumstances is the only sensible thing to do.