Am I allowed to invest money in a dormant pension plan?

peterg1965

I am fortunate to be in a final salary non contributory pension scheme - Armed Forces. Many moons ago I opted out of Serps and had the contributions place in a private pension with Scottish Equitable (1988-1993). In 1993 i opted for a longer fully pensionable contract in the Forces which meant that I had to contract back in to the AFPS.

I now have a Scottish Equitable Personal Pension that has lain dormant for 13 years and is currently worth about £15000 (from the latest 2006 annual statement). It will not mature until I am 65 (in 2030). My question is: am I allowed to fund this pension whilst I am still still serving in the Armed Forces and accruing my pension on that scheme? Or do I have to wait until I leave the Forces (circa 2018). Can I also transfer the funds from the Scottish Equitable pension pot to another company if it is not performing well? Pension legislation seems to be very confusing!

Any advice would be appreciated.

EdInvestor

peterg1965 wrote:

I now have a Scottish Equitable Personal Pension that has lain dormant for 13 years and is currently worth about £15000 (from the latest 2006 annual statement). It will not mature until I am 65 (in 2030). My question is: am I allowed to fund this pension whilst I am still still serving in the Armed Forces and accruing my pension on that scheme?

Yes

Can I also transfer the funds from the Scottish Equitable pension pot to another company if it is not performing well?

Yes. You should also check the charges on old plans they tend to be far too high for modern conditions.

Ask Scot Eq if they can offer you a new deal with low charges and a good selection of (usually external) funds to choose from.It may not actually be necessary to move the whole pension to a new company.If they don't want to play ball, just move elsewhere.

dunstonh

Can I also transfer the funds from the Scottish Equitable pension pot to another company if it is not performing well?

The pension itself doesnt make or lose money. Its the investment funds within it and you may not need to move the pension but just investigate which investment options are available to you and if they can be used to suit your goals.

Yes. You should also check the charges on old plans they tend to be far too high for modern conditions.

Whilst that is correct for many pre 2001 plans, there are a good many plans where the reverse is true and its never best to assume one way or the other. Also Guaranteed annuity rates (GAR) were available with some providers right up until 1995. So, with pr 1995 cases, it is always worth looking at what guarantees there may be on the plan.

peterg1965

Many thanks for advice. So if i am permitted to contribute to the Scottish Equitable pension how much am i allowed to invest per month (or year)?

dunstonh

Upto £215,000 a year but you only get tax relief up to 100% of your net relevant earnings. The amount includes all pension contributions and doesnt matter if its an old or new pension scheme.