Should I transfer into a Stakeholder?

[Deleted User]

Hello, I am 35 years old and have a Personal Pension fund worth £17K with Scottish Widows, it is invested in a with profit fund.

I am considering transferring the funds into a Scottish Widows Stakeholder pension to take advantage of a lower management fee (1%).

I know very little about pensions, am I doing the right thing? I am contracted out BTW.

Thanks in advance. :j

dunstonh

Scottish Widows personal pension is far better than their stakeholder pension. If has all the stakeholder funds at 1% plus a load of other external funds. Including most of the bit hitters. If its a "proper" scot widows personal pension, then fund switching may be more appropriate. If its a LTSB Scot widows pension, then transferring may be better.

Another thing to note is that Scot Widows pensions were being issued up until 1995 with guaranteed annuity rates. If you have these, they could be more desirable to keep rather than lose.

A final note is that most of the Scot Widows legacy pensions are already on a 1% fee basis. Little point switching it for that reason. Although the with profits fund choice could be altered. However, that would depend on those GARs and charges.

am I doing the right thing?

If you don't know the answer to that, then you are best not doing it. Better off seeing an IFA instead and place the liability for the decision with them.

EdInvestor

Scot Widows pensions were being issued up until 1995 with guaranteed annuity rates. If you have these, they could be more desirable to keep rather than lose.

Absolutely. Check whether you have one of these and also any guaranteed annual growth rate on the WP fund you are in. Also check what annual fee you are paying now.

[Deleted User]

I don't have a guaranteed annuity rate and I just found out that my annual fee is actually 0.85%! I am now leaning towards starting a new Stakeholder to spread the risk and keep the old Personal Pension going at the same time, but am going to speak to a FA about it.
Thanks for your input, you 've been very helpful.