Standard Life pension transfer?

MM2005

Cheers Ed, will do. C.I.B. - as mentioned in a previous post, she is entitled to shares.

MM2005

Guys - just a quick update to the above. Found out the company scheme is in fact an 'occupational money purchase pension scheme'. Now, I've no idea what the difference is between this and a standard 'group pension scheme'? What difference will this make in any decision whether to transfer funds from a private scheme. Also, from what I can see my wife's own pensiuon scheme with SL is not a stakeholder - I thought she had moved to this but she obviously didn't.

So, I can certainly try and find out what fund choices are available for both and charges (I know the company one is 1% for the split of funds they have automatically allocated). What's the feeling though on whether to transfer funds from a rivate pension into the money purchase one? Do you think it's better to just freeze the private one and not transfer? Could it be better to continue to contribute to the private one (and reduce her own contribution to the company scheme but let them make the 5% salary payments)? She may have to pay a minimum anyway (3%). Any general advice appreciated - if you can't do this based on the facts provided please let me know what more you need to know.

EdInvestor

MM2005 wrote:

Guys - just a quick update to the above. Found out the company scheme is in fact an 'occupational money purchase pension scheme'. Now, I've no idea what the difference is between this and a standard 'group pension scheme'? What difference will this make in any decision whether to transfer funds from a private scheme.

I wouldn't do this unless there is a big difference in the charges, because occupational schemes usually have more restrictions than GPPs and no paerticular investment advtange iof they are money purchase. A charge of 1% with no choice of star funds is not very attractive.

Also, from what I can see my wife's own pensiuon scheme with SL is not a stakeholder - I thought she had moved to this but she obviously didn't.

Good - charges are the same and chice of funds is much better in the non stakeholder.Check out the funds available that she can choose instead of With profits: I see the Invesco Perpetual High Income fund is on the list for instance, that's one of the best in the UK It has an annual charge of 1.8% but the performance history is outstanding, well worth it.[ Note that this is not advice and that past performance is no guide.....etc]

Could it be better to continue to contribute to the private one (and reduce her own contribution to the company scheme but let them make the 5% salary payments)? She may have to pay a minimum anyway (3%).

It would be if she can get her own pension into a few of these top level funds IMHO.

dunstonh

I dislike generalisations but Stakeholders are becoming obsolete. They served their purpose on bringing charges down but the limited fund range is a massive disadvantage and you can now get personal pensions which are cheaper than stakeholders on exactly the same funds.

You are investing to make money whereas stakeholders are investing to save charges by using low cost "budget" funds. In some areas, particulary low risk areas, that can be a good thing and stakeholder could still be right for the person wanting a very low risk portfolio.

You could compare stakeholder to Tesco or Morrisons "own brand" label. In some areas you get the odd thing where the quality is good but on the whole the range is not as good as the proper brands. Its cheap and you get what you pay for.

MM2005

Thanks for the advice guys. Well, looks like she/we won't be transferring/closing the private pension. We'll take you advice to look at different funds though and try and cut back on her own contributions to the company scheme. May have to freeze the private one (and stop payments) if she has to pay a certain amount intothe company scheme (of her own money).

Thanks again - much appreciated.

EdInvestor

If she's a basic rate taxpayer, after taking advantage of the free money from the employer, she'd be better to put additional savings into her annual 7k ISA allowance - she can always top up pensions later under the lifetime limit, but the ISA is 'use it or lose it' on an annual basis.

MM2005

EdInvestor wrote:

If she's a basic rate taxpayer, after taking advantage of the free money from the employer, she'd be better to put additional savings into her annual 7k ISA allowance - she can always top up pensions later under the lifetime limit, but the ISA is 'use it or lose it' on an annual basis.

We have an offset mortgage so we are trying to keep as much as possible in the savings account hence we'e not using our ISA allowance. Certainly something to think about though. Cheers.

EdInvestor

I mean the stocks and shares ISA (7k), not the cash ISA.

dunstonh

We always mean equity ISAs in respect as an alternative to pensions. A cash ISA is not an ideal retirement planning product for the long term. Ok if you were 5 years away but not if you are long than that.