Frozen Pension Conundrum

chickster6

I am currently a full time mum but have 2 pensions which are frozen. One is worth about 35k as it stands and the other is a historic 'opted out of SERPs' pension that is worth about 15k. They are with different companies. My conundrum is, should I merge the 15k into the 35k? I am a bit dense about these things but I realise that if I move it it will be less than 15k. What do others advise?

dunstonh

I am currently a full time mum but have 2 pensions which are frozen. One is worth about 35k as it stands and the other is a historic 'opted out of SERPs' pension that is worth about 15k.

Neither of these will be frozen.

My conundrum is, should I merge the 15k into the 35k? I am a bit dense about these things but I realise that if I move it it will be less than 15k. What do others advise?

It may be the best thing to do. Or maybe the other way around. Or more likely a consolidation into a modern contract. Whatever the outcome, it is right to look at it is things have changed a lot and modern contracts are often better than legacy ones (not always so you cannot assume).

Loughton_Monkey

chickster6 wrote: »

......but I realise that if I move it it will be less than 15k.....

This is not normally the case. Do you have any special terms that confirm what you are saying is correct?

If a Final Salary scheme, then you should not even consider moving it. If it's a more normal money purchase scheme in funds, it will normally be transferrable - at market values, but in cash - to another scheme in which you will put that same cash into other funds.

xylophone

The £15k pension - deferred final salary? From which years?

35k pension - what kind? From when?

chickster6

Thanks for your responses. Although generally a savvy person, pensions flummox me. When I said 'frozen' what I meant was that there is currently nothing being paid into either.
The 35k pension is with L&G and was originally linked to the mortgage I had on my first house. I started it in 1998. As it is a private pension I assume it's not a 'final salary'.

The 15k pension is an odd one. When I was a student working part time in 1992/3 a company came in to ask if we wanted to 'opt out of SERPs'. I said yes and thought no more about it. The company finally tracked me down and apparently there is c15k sitting there. When I read the paperwork I seem to recall that there was one figure for leaving it where it was and a lower figure if you wanted to transfer it.

xylophone

Presumably the "Serps" contracted out pension is held with an insurance company?

You say that your L&G pension was connected to a mortgage - are you sure that this is a pension and not an endowment policy of some kind? I have never heard of a pension connected to a mortgage but I am no expert, really only having had experience of FS schemes.

chickster6

The L&G pension was designed to pay off my mortgage of 90k initially. My FA at the time suggested it as I didn't fancy an endowment and hadn't made any pension provision. So, should I merge them, do you think?

xylophone

I think your bet bet would be to get some personalised advice from an IFA with expertise in pensions. It is just possible that the L&G pension has valuable guarantees with it and this needs checking. http://www.unbiased.co.uk/ifa-qualifications
http://www.cavendishonline.co.uk/pensions?gclid=CNfN-LXwxa8CFYsntAodSw07YQ might be worth a read for information.
http://www.unbiased.co.uk/pensions