Is pension transfer worth it ?

paulr999

Hi,

Im looking for a bit of advice re pensions. Im 55 and have had several jobs over the years with the pensions of 2 of those projecting about enough to live off. I also have several bits'n'bobs of pensions projecting between £700-£800 pa in todays money. I have not contributed to any pension for about 3 years.

The company pension of my first ever job has offered the ability to transfer with enhanced transfer value.

The figures are as follows :

Transfer value of pension £21,100
Projected Pension is £1,140 pa
Enhancement being offered is £5790 (with the ability to transfer all this, or take some or all of this as cash payment) bringing the transfer value up to £26,790

My questions are as follows :

1) Is it worth transferring everything over to one of my existing small pensions (if that is possible) ?
2) Should I keep the pension where it is
3) Should I transfer and take some/all the cash ?
4) as 1) above but with making a small regular contribution from now on ?

Thanks in advance,
Paul

CannySaver_2

Hi

The enhancement you have been offered sounds signficant. but you need to be wary about giving up guratanteed, and usually index linked benefits, just for the sake of a few thousand quid.

Personally when it comes to final salary transfers I would always seek IFA advice. Either find a recommendation from friends or family, or use www.unbiased.co.uk to find an adviser. Make sure they are independent, suitably qualified to deal with final salary schemes and that they have recent experience in this market. Also, pay them a fee for their work, in my opinion this is the only way to guarantee impartial advice. If they get paid only if a product is recommended at the end this could, and indeed has in the past, skew the advice.

I would get the IFA to look at the enhancement you have been offered whilst looking at your other pensions. The answer might be to transfer one, some, all or none. A good IFA will look at your goals and aspirations, attitude to risk, the charges and performance of your money purchase schemes, the guarantees on your defined benefits schemes and come up with a recommendation for each pension.

I hope this helps.

The Canny Saver

gadgetmind

paulr999 wrote: »

Transfer value of pension £21,100
Projected Pension is £1,140 pa
Enhancement being offered is £5790 (with the ability to transfer all this, or take some or all of this as cash payment) bringing the transfer value up to £26,790

Based on those figures, a transfer might well be your best option, and this could also maybe mop up your old pensions.

As what age is that projected pension? Is it index linked and does it have anything for spouse?

An IFA could be an option if you're taking an annuity now, but otherwise could prove expensive.