Reorganising 2 Small Stakeholder Pensions

stuart264

I have managed to acrue 2 small stake holder pension amounts, each about £2,500 making about £5000

I didnt pay much attention when I took them on as I was paying in them to well "manipulate" and reduce payments to the CSA.

I am trying to sort out my finances and put them in order and I would like to know if its possible to transfer the 2 pensions into one scheme that actually makes money as my scheme with HSBC seems to do nothing but lose money or if possible cash in some or all of this amount as I could really do with the money right now.

All suggestions greatfully accepted.

EdInvestor

You can't cash them in.

You could switch them to better HSBC funds rather than transfer the whole thing.See the choice of funds on the link, starting at no 1481 and over the page.

http://www.trustnet.com/pen/funds/perf.asp?sec=all&status=all&def=1&txtS=&txtSS=&sort=4&page=14&ss=0&columns=


The funds are a bit bog standard but they're not actually loss making.

dunstonh

As Ed says its not the pensions that lost money, its the funds you invest in. I have done a few HSBC stakeholder transfers out as their fund range, whilst built for the novice investor who doesnt know better, isnt good enough for an experienced investor or financial adviser.

stuart264

Well I am starting to learn investments. If I cant cash the pair of them in whats the best option for consolodating them both in a way that will ensure a decent return as I want to part company with HSBC totally plus I have to track down the paperwork for my other personal pension

Sorry I really am this new and this bad at this stuff, the only reason I had a pension in the first place was to lower my CSA payments

EdInvestor

Perhaps you'd like to move the money to a low cost online Sipp?That would give you the opportunity to invest in any of the funds out there, plus shares as well, if you like.

Are you expecting to contribute more into the pension?

Have a look at these two Sipp providers:

Especially cheap for regular saving into unit trusts
https://www.hargreaveslansdown.co.uk

Especially good for shares as well as unit trusts:
https://www.sippdeal.co.uk

Good place to check out the best funds to choose:
https://www.citywire.co.uk/Funds/Home.aspx

dunstonh

A SIPP should only be considered if you know what you are doing or are using an indepedent adviser. Otherwise you are just going to end up paying more in charges without utilising any of the benefits.

stuart264

To be honest I dont know what I am doing and we are talking small amounts so I doubt very much a IFA would be interested i.e. no profit.

I think the best thing for me to do is start reading up on SIPP's and invesntments and work out how I put the lot into a couple of managed funds

dunstonh

I think the best thing for me to do is start reading up on SIPP's and invesntments and work out how I put the lot into a couple of managed funds

That comment suggest you would be better off using a stakeholder pension or possibly a personal pension (offers a greater fund range including a large number of external funds but usually cheaper than a SIPP and also includes stakeholder funds at stakeholder charges so you can mix and match).

a "couple" of managed funds is not what the SIPP is about. 10-13 funds or direct investments into shares (for example) is what a SIPP is about. A couple of funds is stakeholder territory. A few more than that is personal pension territory. You are just going to end up paying charges for the sake of paying charges if you go with a SIPP.

david78

If there are no dealing charges and the initial charges are about the same (5%-5.25% or 0%-0.25% from a discount broker) I don't think the charge is linked to the number of funds is it?

If you buy 10 funds with an ongoing charge of 1.25%, then you will pay the same charges as 5 funds with the same ongoing charge.

I sort of agree that a stakeholder may be more suitable here, especially if the pension is not to be added to in the near future.

dunstonh

I don't think the charge is linked to the number of funds is it?

Its not but I was using it as a rough yardstick. I mean, if someone is only going to invest in one or two funds, then a basic stakeholder should easily offer the required areas to invest in and that will be the cheapest option.

If someone requires a little more diversification then a stakeholder may be ok but a personal pension would offer a greater range.

If someone wants the full monty and is going to utilise it then a hybrid/full SIPP would do be fine.

There is no point paying more for a product if you are not using the features you are paying more for.

If you buy 10 funds with an ongoing charge of 1.25%, then you will pay the same charges as 5 funds with the same ongoing charge.

Correct but if the stakeholder is 1% then why pay for the same funds on a SIPP at 1.5%?

EdInvestor

The point about low cost online (DIY discount) SIPPs is not the large selection of funds ( for heaven's sake we're only talking about 5k) but that you can invest the money in a couple of the best funds.

This will usually be cheaper than accessing these funds via an insurer.

Forget about generic managed funds, they are never top performers.