I have 4 pensions and need help!!

liverpoolcarl

Hi All,

Currently I have four pensions and I have just changed employer and have joined the company pension scheme.

I am 25 now and quite happy in my new job and can see myself staying for the considerable future.

Currently I have the below pensions:

3 Years Final Salary Police Pension (Deferred)
8 Months Legal + General Company Pension (Deferred)
2 Years Wesleyan Personal Pension (Currently Paying into) - £130 per month
4 Years Wesleyan Stake Holder Pension (Currently Paying into) - £24 per month

My reason for writing is that I have just joined my new employer and there pension scheme with Clerical Medical. The IFA who works for my employer who came to see me to arrange my new pension is requesting transfer statements for all the above pensions on my behalf.

I am fine with transferring my DEFERRED pensions to my new provider providing the statements reflect this.

My other pensions with the Wesleyan I took out as a backup/safeguard to any shortfalls in my retirements and because I knew I would be changing employers a few times.

My IFA is recommending subject to the statements being ok, that I also transfer my personal / stakeholder to my new scheme and increase my contributions to my current pension via my employer. I am going to be paying 5% and my employer will pay 5%. If I do increase my contributions my employer will not go above 5%.

I would just like people’s options on only having one pension with good contributions as oppose to keeping the 3 I have??

Thanks for you help in advance.

dunstonh

I would expect the IFA to recommend the personal/stakeholder arrangements are transferred but the Police pension is left. The same would apply to the L&G company pension if you mean you worked for L&G. If its a money purchase scheme administered by L&G, then thats a different matter.

EdInvestor

That's a lot of pensions for a 25 year old

Point 1 :It would NOT be sensible to transfer a gold plated govt final salary pension into a personal money purchase scheme.Don't do it.The police pension will be uprated for inflation to retirement and will already be very generous, you will not lose out if you leave it there.

8 Months Legal + General Company Pension (Deferred)
2 Years Wesleyan Personal Pension (Currently Paying into) - £130 per month
4 Years Wesleyan Stake Holder Pension (Currently Paying into) - £24 per month

These three pensions (but see above re L&G)could be amalgamated somewhere, but the new CM pension may not be the right place, and amalgamatuon might not be the right strategy.

The two important aspects to pensions like these are

a)what funds are available to invest the money in and
b)What charges you are paying

Provide some info on these and we might be able to take a view.

liverpoolcarl

Thanks guys,

A bit more info below...

The L&G pension was a personal pension that my employer paid into.

My new CM pension is split as below:

UK Equity - 20%
European - 20%
North American - 20%
Property - 40%

The deductions for charges etc are illustrated as below which the IFA tells me is around 1% of the fund value each year

Year 1 - £9
Year 2 - £39
Year 3 - £91
Year 4 - 168
Year 5 - 271
Year 10 - £1,300
Year 15 - £3,520
Year 20 - £7,590
Year 25 - £14,400
Year 30 - £25,300
Year 35 - £42,300
Full Term - £63,900

EdInvestor

You may wish to check out how the funds you are in at the various pensions are rated.This site has a rating system with funds divided by category.The funds are most probably "ABI" funds.

https://www.citywire.co.uk/Funds/Home.aspx

Most people prefer the "IMA" funds, which are now offered in some of the better pensions. Needless to say in either case you would tend to prefer funds which have a reasonable track record in the top 10.

ReportInvestor

Good to see someone without student debts and a bit of early pension saving under their belt .

liverpoolcarl

Thanks edinvestor. Do you know or anyone else know if the charges are ok compared to other similar pensions ??

Also I am getting the impression from reading on the boards that it would be a good idea (if my transfer statements are ok, excluding my police pension) to transfer my pensions into my CM pension, stop my current direct debits and increase my contributions to CM from 5% to say 8% ??

So this would just leave me with CM and my Police pension..

I am just worried about not having a backup in case CM does not peform to a reasonable level..

dunstonh

Thanks edinvestor. Do you know or anyone else know if the charges are ok compared to other similar pensions ??

1% to 1.5% is the ideal for funds.

I am just worried about not having a backup in case CM does not peform to a reasonable level..

You are not investing in CM. CM are just the administrator for the pension scheme. You invest into the funds that they offer and can have a selection of these and the sectors mentioned seem perfectly find for the timescale you have.

liverpoolcarl

Does most people agree with my IFA that its a reasonable idea to cancel my Weslyan pensions, transfer or defer them and increase my contributions to my new CM pension ??

ReportInvestor

Are both of your Wesleyan pensions in the with profits fund?

If so, Wesleyan is a very well capitalised mutual life assurance company. This means that there is no need for them to demutualise (and pay a windfall) in the short term, but if they do, then they could afford to pay a decent one. Nor has the current board any intention of demutualisation AFAIK - but "never say never".

Standard Life members recently received nearly a £500 basic rate bonus - which wouldn't be a bad return for the £1200 or so you have paid in to the stakeholder.

It's just an idle thought .

You would qualify for a (speculative) windfall even if you just left the smaller pension with the company & stopped paying in / deferred - as long as you continued to maintain some with profits investment with the company until / if they decided to close the door on mutuality.

[They stopped being a true mutual, and broke with their heritage, about 4 years ago when they stopped door to door collections and refocussed on high net worth investors. ]

EdInvestor

liverpoolcarl wrote:

Does most people agree with my IFA that its a reasonable idea to cancel my Weslyan pensions, transfer or defer them and increase my contributions to my new CM pension ??

As mentioned earlier no proper comment is possible on this without knowing

a) what funds the money is invested in and

b) what charges you are paying

and then comparing this with the CM funds and charges.