Pension Novice in need of help!!

happy_hibby

Hi everyone-im a new comer to the forum so be gentle! The advice ive seen so far seems pretty honest and straightforward so i thought id give it a go!

I am moving jobs at the end of April and need advice on my pension. I currently have a Group Salary scheme with Aegon in which i put in 3.5% of salary and my employer puts in 6%. The value of this is currently sitting at £13000.

My new employer is offering a "Contributory Money Purchase Scheme, which is voluntary and contracted into SERPS" which is run on a salary sacrifice scheme.

Could someone tell me what is the best option for my current pension; should i transfer the value into my new scheme or start a SIPP with that fund and start completely from scratch with the money purchase scheme.

Im only a baby at 28 so i have a wee bit of time to go in terms of sticking the money into a higher risk fund etc.

Thanks in advance,

Kev

Loughton_Monkey

Your new salary sacrifice pension scheme will be set up with a specific provider.

Almost certainly, they will give you a choice of funds in which you can invest. Each of those funds will have charges attached to them. Given that your new employer has set this up, you really have no choice but to use it and accept the charges that have been negotiated for you. Therefore the main 'variable' for the future will be the funds you choose.

Now if we go back to your Aegon scheme, we could say exactly the same about that. Currently, you have £13K sitting in a selection of [unknown to us] funds which attract a level [unknown to us] of charges in the future.

It seems you have three options (or maybe two).

1. You might be able to transfer your Aegon money into the new scheme you are just starting. [We don't know if that is allowed in your case].

2. You could leave the Aegon funds exactly where they are.

3. You could transfer the Aegon money to a new and different pension provider.

So you should take a little bit of time to review all of those options. Look at the funds and charges applicable to the Aegon money. Look at the funds and charges available in your new scheme. Look at the funds and charges available under any new arrangement you might find.

At this stage, only you know whether or not you are a 'correct' candidate to enter into a Self Invested Pension Plan. These tend to be the right vehicle for the higher net worth and more sophisticated investor. If that's 'you', then consider it.

dunstonh

Could someone tell me what is the best option for my current pension

not on what you have said so far, no.

should i transfer the value into my new scheme

if the new one is better than the old one then yes. If not, then no. We cant tell as we dont have the details.

or start a SIPP with that fund and start completely from scratch with the money purchase scheme.

Why SIPP? Why not PPP or SHP? What is it about the SIPP that is better than the other 3 options?

Im only a baby at 28 so i have a wee bit of time to go in terms of sticking the money into a higher risk fund etc.

Single fund investing is rarely a good option (unless you are talking about self balancing portfolio investment funds). So, sticking it in a higher risk fund is probably not a good idea.

Bigsmak

happy_hibby wrote: »

Im only a baby at 28 so i have a wee bit of time to go in terms of sticking the money into a higher risk fund etc.

Thanks in advance,

Kev

Good for you paying into a pension and being aware of the future at 28.

Ps - I guess you are a Hibs supporter from your name, your teams been on a wee run...

happy_hibby

Aye we've finally started to turn things around-not before time though!!