General Pension Advice

nickc1

I wonder if anybody can help me as I am having trouble getting my head around the general principles of pensions.

I am 39 yrs old and currently have a number of pensions as follows:

1) Aviva/Norwich - as a result of opting out of SERPS - set up in the early 90's - I can't recall the current value
2) Zurich Group Pension - set up by previous employer and not currently being paid into (current value approx £10k)
3) Standard Life Personal Pension Plan - set up by previous employer and not currently being paid into (current value approx £13k)
4) Standard Life Group Personal Pension Plan - currently live and being paid into monthly (current value approx £18k)

And have a number of queries:

a) Is it advisable to keep all of the above separate pensions or try to 'combine' them (if this is possible) - if so how would I deal with different chosen retirement dates etc?

b) On the basis (as I understand it) a pension is only worth what it is worth at the point of cashing in, what (in principle) is the 'aim' in the preceding yrs (i.e. now) i.e. how do I build up my pension pot:
- is the aim to accumulate as many fund 'units' as possible by say transferring my monthly payments regularly to funds that have low 'unit' prices and keeping the 'units' already purchased in what ever funds they might be in and thus spreading my risk; or
- is the aim to regularly actually switch funds by effectively selling my units (when the unit price is high) and then with the proceeds buy into new funds?

If it is the latter how (on the basis you can't 'bank' any of the proceeds and I assume the units always have to sit on at least one fund) do you actively manage the process to ensure the 'pot' increases in value.


To date (as you might be able to surmise) I have not given the above much thought, however I feel it is time that I got to grips to what I can do to maximise my pension.

Many thanks

dunstonh

a) Is it advisable to keep all of the above separate pensions or try to 'combine' them (if this is possible) - if so how would I deal with different chosen retirement dates etc?

Depends on the terms of the pensions you have and those you would transfer them to. Investment selection would have an impact as well. The selected retirement date is irrelevant as its just an indication and can be changed.

b) On the basis (as I understand it) a pension is only worth what it is worth at the point of cashing in, what (in principle) is the 'aim' in the preceding yrs (i.e. now) i.e. how do I build up my pension pot:
- is the aim to accumulate as many fund 'units' as possible by say transferring my monthly payments regularly to funds that have low 'unit' prices and keeping the 'units' already purchased in what ever funds they might be in and thus spreading my risk; or
- is the aim to regularly actually switch funds by effectively selling my units (when the unit price is high) and then with the proceeds buy into new funds?

The aim is to build value. How you do it will depend on your investment knowledge and experience or that of you servicing adviser if you were to use one.

If it is the latter how (on the basis you can't 'bank' any of the proceeds and I assume the units always have to sit on at least one fund) do you actively manage the process to ensure the 'pot' increases in value.

You can bank the proceeds if you wanted but the problem with trying to time the market is that it usually ends up being futile. You cannot predict the unpredictable. When would you bank and when would you reinvest?