Have a pension I need to transfer but can't to my company pension

nz83

Hi all - hoping someone can help me choose the right pension for my circumstances.

I was previously an employee at Royal Mail and I had a pension with their scheme. As I left the firm you have to transfer your pension to another scheme or risk losing the company contribution and tax benefits. I have about £7000 in the scheme, so would lost over £5,000 if I don't transfer it.

I started at a new company and signed up to their company HSBC pension, which unfortunately does not take transfers from other pension schemes for some reason.

Thus I need to start a new pension with another provider, but only want to deposit the lump sum and leave it there until I retire. Is this the best thing to do? What pension would be best for this? A stakeholder pension?

Or would it be better to get a pension and make the lump sum deposit, followed by a nominal monthly amount to get a better pension rate (e.g. £20/month).

I'm 28 so whatever I do should add up to a reasonable amount by the time I retire.

Advice please - no idea what pension I should get as they all have various charges depending on what kind of deposits you're making

Thanks

N

gadgetmind

Given the fairly small pot, and that any additional monthly contribution will be small, a stakeholder might be your best option, but I don't know anything about that Royal Mail pension.

Cavendish Online do "repensioning" fairly cheaply and there are a number of pension companies you can move to via them. I went with Aviva.

There is an MSE article on this, but it's rather out of date.
http://www.moneysavingexpert.com/savings/bigger-pensions?utm_source=forum&utm_medium=clicks&utm_campaign=resourcebar

Of course, you could contact an IFA, but I was quoted £400 to move a £2000 pot a while ago, which is why I did it myself.

dunstonh

I started at a new company and signed up to their company HSBC pension, which unfortunately does not take transfers from other pension schemes for some reason.

It is because the FSA treat defined benefit pension transfers as high risk and a default position of mis-sold unless proven others. They include direct applications in that as well. So, you need an IFA to sign off on it and HSBC does not retail the HSBC group pension via IFAs (they wouldnt get any business even if they did. So, they dont bother).

Of course, you could contact an IFA, but I was quoted £400 to move a £2000 pot a while ago, which is why I did it myself.

The OP may not have a choice if its a defined benefit scheme

gadgetmind

dunstonh wrote: »

The OP may not have a choice if its a defined benefit scheme

Yes, the Royal Mail aspect did worry me. People do seem to get caught between a rock and a hard place with having to move the pension but not having a cost-effective way to do it.

xylophone

Are you sure that you don't have the option of leaving it with Royal Mail as a deferred pension? http://www.royalmailpensionplan.co.uk/25/leaving-the-plan

dasherman

nz83 wrote: »

Hi all - hoping someone can help me choose the right pension for my circumstances.

I was previously an employee at Royal Mail and I had a pension with their scheme. As I left the firm you have to transfer your pension to another scheme or risk losing the company contribution and tax benefits. I have about £7000 in the scheme, so would lost over £5,000 if I don't transfer it.

There seems to be some confusion as to which scheme you may have been in at RM.So here's a few points to make:

1)If you started RM before April 2008 you will be part of the defined benefit (final/average salary) scheme.
2)If you started after the above date you will be part of their defined contribution scheme(similar to personal/stakeholder).
3)If '1' applies and you had 2 or more years service you will be entitled to a preserved pension.
4)Transferring is an option, not something you have to do.
5)You only lose the company contributions if you take a refund, not if you transfer.

Further reading can be found on the salary based schemes here: http://royalmailpensionplan.co.uk/
And the defined benefit scheme here: http://www.zurich.co.uk/royalmaildcplan/home/introduction.htm