Keeping Track of Pensions

Gambler

I am currently thinking about changing jobs and have been for a few interviews etc. When discussing benefits it made me think about having to change pensions again.

How do people keep track of their different pensions? How will the pension schemes know how to pay out when you retire? Do you have to keep them informed of your change of address etc?

I am 34 now but left it a little late to start a pension. I had my first job when I was 19 and if they had allowed me would have joined the pension scheme on the day I started but you had to be 21.

When I turned 21 I opted to join but then I saw how much was being deducted from a colleagues pay packet (5%) and in those days I had a very good social life so decided not to opt in after all.

I didn't realise that reduced NI and tax relief meant the figure I saw wasn't the actual decrease in your net pay.

I eventually joined the scheme which was final salary aged 26 and paid in for 4 years before the business unfortunately shutdown and i was made redundant. I think the final statement worked out a pension of £1200 per year.

I have been in my current job for nearly 4 years and for the first 18 months paid into another final salry pension. I think the final statement worked out a pension of £400 per year.

The company was then taken over and I now pay into a scottish widows pension (7% me and 7% by employer) and after just over 2 years I have a fund value of £12K.

Do I need to look at trying to transfer any of these pensions when i move on again or just keep them in their seperate pots?


Many thanks

dunstonh

How do people keep track of their different pensions?

Easy. After all, if you had thousands, tens/hundreds of thousands of pounds in the bank, wouldnt you remember to keep an eye on that. Pensions should be no different.

All changes of address should be notifed to the scheme administrators.

How will the pension schemes know how to pay out when you retire?

They have an obligation to try and find you. However, another way of looking at it is; do you want your money or not? It doesnt take 5 minutes to notify a change of address.

When I turned 21 I opted to join but then I saw how much was being deducted from a colleagues pay packet (5%) and in those days I had a very good social life so decided not to opt in after all.

oops. A little short sighted and that will cost you more in the long run.

Do I need to look at trying to transfer any of these pensions when i move on again or just keep them in their seperate pots?

Depends on the type of pensions you have on the old schemes and what retained benefits they offer. If none, then it can be beneficial to combine them. A transfer analysis (TVAS) should be done to ascertain if its worthwhole or not.

Gray0103

I have put 2 former company pensions into a single stakeholder pension, I don't know if this is the best idea moneywise, but I felt I could 'keep tabs' on the money, and it would increase my flexibilty when it came to looking at other jobs.

dunstonh

Gray0103 wrote:

I have put 2 former company pensions into a single stakeholder pension, I don't know if this is the best idea moneywise, but I felt I could 'keep tabs' on the money, and it would increase my flexibilty when it came to looking at other jobs.

You can lose thousands of pounds income by doing this. It is never recommended that you do this without knowing what you are doing and having compared both schemes fully.

Flexibility would rarely stack up as a reason for an adviser to do it because what difference in flexibility is there?

Gray0103

dunstonh wrote:

You can lose thousands of pounds income by doing this. It is never recommended that you do this without knowing what you are doing and having compared both schemes fully.

Flexibility would rarely stack up as a reason for an adviser to do it because what difference in flexibility is there?

Perhaps an advisor wouldn't advise me on this but my brother who is quite senior in a pension company (they deal soley in company pensions) said I would have greater security, and added flexibility (thats not advise to the masses, that was purely based on my situation)

dunstonh

Perhaps an advisor wouldn't advise me on this but my brother who is quite senior in a pension company (they deal soley in company pensions) said I would have greater security, and added flexibility (thats not advise to the masses, that was purely based on my situation)

An adviser would do a TVAS and get projections on all options and make comparisons on that basis. If your brother did a TVAS on your pensions and found that the occ schemes werent as good as a stakeholder, then its fair enough. Most pension mis-sales back in the late 80s/early 90s were linked to occupational pension transfers. Averages would show around 99 out of 100 definded benefit pensions are best kept where they are rather than move them to a personal arrangement.

EdInvestor

Of course there's a big difference between a defined benefit (final salary) company pension and a defined contribution (money purchase) one.

Normally the first type should be left strictly alone ( though a bit of monitoring might now be in order since all these deficits and windups started happening ).

There's usually nothing much to stop you from moving the second type to a personal fund, unless the deal on charges is very good. This type of pension needs much more attention, so it is easier to have it somewhere convenient.