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Transferring a pension

Tirian
Posts: 993 Forumite


At a previous job I paid into a Norwich Union stakeholder pension scheme for a year, and the total contributions should have been about £1500. I have now joined the CIS stakeholder pension scheme at my new workplace - what are the pros and cons of transferring my Norwich Union fund into the CIS one?
I'd like to keep things simple if possible, so it would seem to make sense to transfer and keep it all in one place, and one set of people to deal with.
Also, a couple of other questions -
First, my Norwich Union plan was supposed to be 5% contribution from me, and a matching contribution from employer up to 3%. I've just looked at old payslips and realised that even though my salary was raised several times in this period, my contributions did not go up. Does this mean that the employer contributions would not have been assessed properly either? And is there any way I can get NU to correct this now?
Second, when I filled in the forms for CIS, there was a choice of either a percentage of salary contribution, or fixed amount. I chose 15%, but when my papers came through I found that they were proposing to deduct 15% of my gross wage - but from my net wage! And then add the tax back - meaning that I would effectively be paying 20% of my gross salary!!
When I called them to query this, the guy I spoke to didn't seem to understand what my problem was ... how on earth can that possibly be a logical way to work out a '15%' contribution??
I am not feeling greatly confident in this whole pension thing at all - if they can !!!! up simple things like that, why exactly am I supposed to believe that they are going to manage my investments properly?
Tirian
I'd like to keep things simple if possible, so it would seem to make sense to transfer and keep it all in one place, and one set of people to deal with.
Also, a couple of other questions -
First, my Norwich Union plan was supposed to be 5% contribution from me, and a matching contribution from employer up to 3%. I've just looked at old payslips and realised that even though my salary was raised several times in this period, my contributions did not go up. Does this mean that the employer contributions would not have been assessed properly either? And is there any way I can get NU to correct this now?
Second, when I filled in the forms for CIS, there was a choice of either a percentage of salary contribution, or fixed amount. I chose 15%, but when my papers came through I found that they were proposing to deduct 15% of my gross wage - but from my net wage! And then add the tax back - meaning that I would effectively be paying 20% of my gross salary!!
When I called them to query this, the guy I spoke to didn't seem to understand what my problem was ... how on earth can that possibly be a logical way to work out a '15%' contribution??
I am not feeling greatly confident in this whole pension thing at all - if they can !!!! up simple things like that, why exactly am I supposed to believe that they are going to manage my investments properly?
Tirian
For where your treasure is, there will your heart be also ...
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Comments
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what are the pros and cons of transferring my Norwich Union fund into the CIS one?
CIS stakeholder pension funds are generally quite poor. NU are generally better.And is there any way I can get NU to correct this now?
Nothing to do with NU. The employer tells them how much they need to take. You need to go back to your old employer and query it.When I called them to query this, the guy I spoke to didn't seem to understand what my problem was ... how on earth can that possibly be a logical way to work out a '15%' contribution??I am not feeling greatly confident in this whole pension thing at all - if they can !!!! up simple things like that, why exactly am I supposed to believe that they are going to manage my investments properly?
Its not their job to manage your investments properly. It's your job or the job of someone you employ to do it. They just follow your instructions.
Does the employer pay into the CIS pension? If not, why have you chosen to do such a poor pension product? If they do, then paying up to the amount to get maximum free money would be the best way and then look at alternative better options.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Ok, I guess I am missing something here ... if I am not paying the pension company to make good investments for me, what on earth am I paying them for? Because they sure as hell get a lot of money out of me at the end of the day ... from what you say, it would appear that it is for basically doing nothing much!
The whole process is about as clear as mud, as far as I am concerned - if it's not the pension company who manage the proportion that I contribute, then why is it on their forms that I fill out all those details?
God, I'm not surprised that a lot of people my age don't contribute to pensions ... nobody actually seems to want to give us any useful information about it. Here's the sum total of all communication I've had about pensions from companies I've worked for:
1st company : got an NU guy to come in and explain it to us (hence why I presumed that it was NU that sorted out all the details). NU guy told me that 5% was a big contribution to make ... although as far as I can tell from advice given in newspaper money columns, it's actually fairly pitiful. Nobody at any time mentioned that a percentage contribution wouldn't actually change in line with my salary .. which I would have thought was a pretty reasonable assumption. They manage it with my tax, my NI and my Student Loan ... why on earth not the pension?
2nd company: told me that although they were technically obliged to offer a pensions scheme, they couldn't and could I please be nice and not say anything because they couldn't afford to set one up.
3rd company: Company manual directed me to a poster on the noticeboard.
So yes, I'm afraid I don't know a great deal about pensions ... but I'm not exactly sure how I'm supposed to find out if no-one wants to talk about them. CIS didn't answer any of my emails asking for clarification of various things I didn't understand in their info .. and of the three times I called them, once I just got voicemail, and once I got someone who didn't seem to have any idea what I was talking about.For where your treasure is, there will your heart be also ...0 -
This is common in the life assurance arena. The standard of customer service is woeful.
You might like to set up a Sipp to transfer old pensions into. The Sipp providers are much better and the standard of investment funds available is much higher.
Try https://www.sippdeal.co.uk or
https://www.hargreaveslansdown.co.uk
You do have to choose the investments yourself though with all these pensions.Trying to keep it simple...0 -
Ok, I guess I am missing something here ... if I am not paying the pension company to make good investments for me, what on earth am I paying them for? Because they sure as hell get a lot of money out of me at the end of the day ... from what you say, it would appear that it is for basically doing nothing much!
The insurance company only handles the admin and the fund managers handle the investments within the funds you have chosen. However, the choice of funds/sectors is down to you and that is where the biggest impact on future returns is. You choose the funds and they will invest it within the rules of their funds.The whole process is about as clear as mud, as far as I am concerned - if it's not the pension company who manage the proportion that I contribute, then why is it on their forms that I fill out all those details?
It is on their form but you have misunderstood what is required.God, I'm not surprised that a lot of people my age don't contribute to pensions ... nobody actually seems to want to give us any useful information about it.
The companies are generally geared up for dealing with advisers. Indeed, most of them now are not able to offer any advice as they dont have the licence to do so.
You have chosen to do all this without advice and that means you are taking on the responsibility for doing everything. The assumption will be that you know what you are doing.So yes, I'm afraid I don't know a great deal about pensions ... but I'm not exactly sure how I'm supposed to find out if no-one wants to talk about them. CIS didn't answer any of my emails asking for clarification of various things I didn't understand in their info .. and of the three times I called them, once I just got voicemail, and once I got someone who didn't seem to have any idea what I was talking about.
If you dont know what you are doing, then why are not using an adviser to do it. You shouldnt expect the insurance companies themselves to offer any advice in these areas. They are reactive only to what you tell them or what an adviser tells them.This is common in the life assurance arena. The standard of customer service is woeful.
Whilst never one to support the insurance companies in general, I do feel this is unfair in the context of this thread. Based on what is said so far, Tirian appears to be expecting the insurance companies to be doing something they are not meant to be doing.You might like to set up a Sipp to transfer old pensions into. The Sipp providers are much better and the standard of investment funds available is much higher.
Also more expensive and if you dont know what you are doing with a stakeholder then going with a SIPP would make matters worse. That said, I wouldnt touch a stakeholder and I no longer recommend them to any of my clients under the age of 55 for the reasons that Ed says.
Tirian, can you answer this question: Is it paid via your employer on the payslip or is it paid via direct debit?
Also, I do seem to recall I thread for some months back where someone else had the same issue with CIS and that was linked to what you put on the application form being misunderstood (i.e. getting gross and net mixed up).
The only time I deal with CIS is when I am taking money out of them to put into much better investments so I dont know what their new business forms look like and what they ask. Which leads back to the other question... why are you paying money into the pension and why CIS?I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
dunstonh wrote:It is on their form but you have misunderstood what is required.
Hmm, I'm not sure it's quite so. The form specified a percentage contribution, or a fixed amount. There was no explanation of the percentage contribution - however, if I fill in a form asking me what percentage of my salary I wish to contribute, and I fill in say "15%" then I would at the least expect it to be applied consistently. i.e. 15% of my net salary, deducted from my net pay, or else 15% of my gross salary deducted from my gross pay. I fail to see how any reasonable interpretation could take that to mean an amount of 15% of my gross pay, deducted from my net pay!You have chosen to do all this without advice and that means you are taking on the responsibility for doing everything. The assumption will be that you know what you are doing.
Choesn? A bit of a Hobson's choice - I've asked for advice from pretty much everyone who I've come into contact with about it so far - and they have ignored me. Nobody has even suggested anywhere that I might obtain advice from. I'm sure it's all very obvious to those who already know, but when you're starting from scratch you need at least a pointer.If you dont know what you are doing, then why are not using an adviser to do it.
Well, because I had no idea that I needed to. The consequence of nobody actually explaining how this strange little industry works.Tirian, can you answer this question: Is it paid via your employer on the payslip or is it paid via direct debit?
Well, the NU was via payslip. I am presuming CIS is the same, but nothing seems to have happened yet since I sent the forms in a few months back. I called them and allegedly it's going to start from next payday - but I am really wondering whether I want to go ahead with them at this stage.Also, I do seem to recall I thread for some months back where someone else had the same issue with CIS and that was linked to what you put on the application form being misunderstood (i.e. getting gross and net mixed up).
Quite possibly me - had an unexpected business trip abroad, and a family bereavement in the meantime, and am just picking up the threads again and trying to sort this hapless mess out. Again.Which leads back to the other question... why are you paying money into the pension and why CIS?
Because I don't know what else to do, largely - and it seems better than doing nothing, although I am beginning to wonder about that. And I don't know how to actually get any advice on it - and I'm somewhat bewildered by the fact that I am expected to pay whopping sums of money to companies who refuse to give me any advice on what I'm doing. Isn't the point of this that they have the expertise in this area, and I don't?
Also it is a priority for me to have my funds invested ethically, and CIS have that in their favour at least.For where your treasure is, there will your heart be also ...0 -
Hmm, I'm not sure it's quite so. The form specified a percentage contribution, or a fixed amount. There was no explanation of the percentage contribution - however, if I fill in a form asking me what percentage of my salary I wish to contribute, and I fill in say "15%" then I would at the least expect it to be applied consistently. i.e. 15% of my net salary, deducted from my net pay, or else 15% of my gross salary deducted from my gross pay. I fail to see how any reasonable interpretation could take that to mean an amount of 15% of my gross pay, deducted from my net pay!
On many providers applications there is a tick box for gross or net. As I said, I dont know the CIS application but it could be that.Choesn? A bit of a Hobson's choice - I've asked for advice from pretty much everyone who I've come into contact with about it so far - and they have ignored me. Nobody has even suggested anywhere that I might obtain advice from. I'm sure it's all very obvious to those who already know, but when you're starting from scratch you need at least a pointer.
The issue is that no-one you have spoken to is authorised to give advice....Well, because I had no idea that I needed to. The consequence of nobody actually explaining how this strange little industry works.
Obviously the "industry" has failed in your case in making you aware that when you want financial advice, you get it from a financial adviser.
To give advice you need to be authorised and regulated by the FSA. If you dont have that authorisation you cant give advice. Most insurance companies no longer have any advisers themselves and leave it to IFAs or authorised representatives who nowadays usually work for other companies. With call centre telephone calls being monitored you tend to find that call centre staff will only stick to facts and will not offer opinion or suggestions in fear that they may be taken as advice.Because I don't know what else to do, largely - and it seems better than doing nothing, although I am beginning to wonder about that. And I don't know how to actually get any advice on it - and I'm somewhat bewildered by the fact that I am expected to pay whopping sums of money to companies who refuse to give me any advice on what I'm doing. Isn't the point of this that they have the expertise in this area, and I don't?
As mentioned, it isnt the job of the company to provide advice. They are order taking and you are giving the orders, not an adviser. The adviser would find out what you want and then research and recommend how/who and when and then complete the paperwork on your behalf.
It really does sound like you need to speak with a financial adviser. There are three types. Tied, Multi-Tied and Independent. Always go independent as that is whole of market and unbiased. The database of UK IFAs is at www.unbiased.co.uk and you can do a postcode search on there to find your nearest. Most will do home visits although some will have offices you can visit.
IIRC, CIS do not discount any of the business so you are buying the product at exactly the same cost as if you were getting advice so you arent making any savings. They are pocketing the money that the adviser would be paid and not giving you the advice.Also it is a priority for me to have my funds invested ethically, and CIS have that in their favour at least.
As do many others.
My questions in your shoes would be:
1 - should I be investing in a pension or an ISA?
2 - how are the funds going to be invested?
3 - what ethical funds meet your goals
and lastly, will you do the paperwork for me and make sure it goes through correctly
No-one forces you to use an adviser but I think it would be a good idea in your case.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I have now joined the CIS stakeholder pension scheme at my new workplace
There should be an IFA involved here who set up the group pension plan at the company.Often the company will pay for some simple advice for employees, which sorts out all this kind of thing. Suggest you ask the HR department if there's a scheme IFA and give him a ring.
BTW I assume the company will contribute to the CIS pension?If not, if you're a basic rate taxpayer you'd be better to forget it and save in an ISA instead.Trying to keep it simple...0 -
CIS do not sell their products through IFAs. No IFA would be involved there. However, you would be right for the majority of other group schemes. I have a colleague who spends all hit time now dealing with new employees on the group schemes under his management. He hardly has time for anything else. My "guess" is that this CIS scheme was a hollow scheme arrangement and that is why there is no ownership or willingness to take ownership. Many of the tied companies that dipped their toes into group schemes (before pulling out) didnt use their local salesforce but dedicated teams which have long been disolved when it became clear that the stakeholder rules were failing.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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I've got almost £6000 in cash ISAs .. how would an ISA be a better option than a pension fund - thought that the only tax relief was on the interest / gain, not the contribution? I'm interested to know how an ISA could be better than a scheme where I can have 22%, or whatever it is, added to my contributions from the the word go.
And in answer, my current employer makes no contribution to the stakeholder pension plan. Am I likely to have to pay a lot for advice? Having drawn up my budget, there's not a lot of room for movement in it what with London rent, student loan payments, & the rest.For where your treasure is, there will your heart be also ...0 -
I've got almost £6000 in cash ISAs .. how would an ISA be a better option than a pension fund
When we refer to ISAs in this sense we mean equity ISAs and not cash ISAs. Cash ISAs are not suitable for long term funds and wouldnt be suitable for long term retirement planning.thought that the only tax relief was on the interest / gain, not the contribution?
There is no difference between equity ISAs and pensions as far as the investment side is concern. Pensions get tax relief on contributions but then you have to pay tax on the income at the other end. ISAs dont get tax relief on contributions but dont have to pay tax on the income at the other end either.
Once money goes into a pension its lost until retirement and you have to buy an annuity (yes there are a few other variations but annuity accconts for most transactions). With ISAs you have total flexibiltity to move it to alternative tax wrappers in future if a better one comes out or you can even put it into the pension later if the pension tax wrapper ever improves. You dont have to buy an annuity with an ISA either.And in answer, my current employer makes no contribution to the stakeholder pension plan.
Looking more like an ISA could be better.....Am I likely to have to pay a lot for advice? Having drawn up my budget, there's not a lot of room for movement in it what with London rent, student loan payments, & the rest.
You get a choice of fees or commission. Commission is paid by provider and built into the cost of the plans (annual management charge). It would cost you no more than you using the CIS pension as that would be on full cost terms. With fees, you pay the bill and no commission is taken which would result in lower annual management charges. In your case and current position, you would probably be better off on commission. You certainly wouldnt be worse off over the CIS contract.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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