Advice...transfer

joeyvicks

hello,

i have 2 pension schemes. 1 was with my previous company who went into receivership last november and 1 with my new company which has been running only a couple of months.
Pension 1 current value = approx 2,500
Pension 2 current = approx 500

Am i best transfering all funds from my old scheme into the current one to consolodate everything or leave them as two seperate?

As you are probably aware im not really clued up in the world of pensions and how they work... so any additional help would be great

Cautious_Investor_3

Hi

Tough one this, you don't say whether they old scheme is a Final Salary, Money purchase occupational scheme, group personal pension plan or Stakeholder.

When making a decision whether to transfer or not you need to take into account a whole host of different things, such as charges, performance, your attitude to risk, any guarantees that would be lost, the complexity of having more than one pension etc etc.

I'd normally say take advice from an IFA, and don't see any reason to say differently this time, except that because the fund value is so small an IFA may want to charge you a fee for the time spent working on the advice. A fee isn't necessarily a bad thing though, at least it removes any potential commission bias!

I'm not sure that helps much!

The Cautious Investor

LongTermLurker

As CI says, you need to weigh up what will be lost if you transfer A into B

Is the transfer value less than the current value?

Does the first pension provide good guaranteed annuity rates?

Does the first pension provide more than 25% tax free cash?

Is the first scheme final salary / defined benefits / Section 32 buyout? You may not be able to transfer, and probably shouldn't anyway.

Are Contracted Out / Protected Rights involved? That could make transfer more complex.

All in all, there's nothing wrong with having 2 pensions, though in light of the small amounts, if there are no complexities to worry about, I'd consider combining them - it would be worth an initial discussion with 2 or 3 IFAs to get their idea. I would have thought commission (which would come out of the investments, not yourself) would be a possibility and you'd hardly notice it so long as the funds don't rocket in value.