Pension advice

Devo

Hi all,

6 months ago I quit my job in London and moved to the Philippines to seek a quieter and simpler life. Prior to that I had been contributing to my company's pension scheme at the highest rate possible (4% iirc) for the past 3 years. My question is what on earth can I do with that small pot of money? Where is it? Can I transfer it somewhere or just leave it with my old company (financial services) who I believe invest it in various stocks and shares annually? I'm 29 now so not quiet ready to retire yet hehe

TIA

jamesd

Is it defined contribution (you can pick the investments) or defined benefit (pension related to your past earnings, company does all of the investment choosing, no option for you to do it)?

Assuming that the value is single digits thousands it's unlikely to be worth the costs of moving it somewhere else while you're a resident of the Philippines.

If it's defined benefit it's even more unlikely because you'd have to pay a few thousand for professional advice to work out if you'd be better or worse off after transferring. And the answer would almost certainly be worse off so you wouldn't be able to go ahead.

Best to consider doing something about it when you're next a UK resident, if ever. If it's defined contribution do continue to watch the investments and adjust he investment choices. You should also find out what Philippines law says about pensions in foreign countries. There's a chance that you'd have tax to pay.

Devo

It's defined contribution but if you don't give them your selections then I think there is a default set of investments that they pick on your behalf (I will check this though).

So how will it work when I reach pension age? Will I just get the money automatically? I may still be here in the Philippines at that time in which case the amount of money in my pot will go a long way here.

Loughton_Monkey

Devo wrote: »

It's defined contribution but if you don't give them your selections then I think there is a default set of investments that they pick on your behalf (I will check this though).

So how will it work when I reach pension age? Will I just get the money automatically? I may still be here in the Philippines at that time in which case the amount of money in my pot will go a long way here.

If you leave it where it is (and there's a lot of sense in doing that) then the amount of money in it now, and the charges, are both 'set in concrete'. So the thing that will affect the actual growth is the funds you choose.

Hence you should make it your business to ensure that your money is in appropriate funds for your own risk file and for the long length of time they will be invested. Unless you are extremely cautious, then because of the length of time, a mixture of medium to higher risk funds might be included.

You can elect to take the pension any time from age 55 upwards. At that time you could take 25% of the value tax free [under British laws, anyway] and the rest would normally be paid as an annuity. There are other options but probably not appropriate to a relatively small fund.