Penions - Transfer or not to Transfer??

superpennycounter

Good morning all :hello:

I am in the process of trying to tidy up my finances....

I've got my weekly budget under control :T and next are my pensions.

I currently have around 6 different pensions. One I pay a small amount into each month (approx £20), my work pension plus four or five other ones which I don't pay anything into.

My question is should I transfer all these into one pot as I am obviously being charged fees for each of these?

I would appreciate any advice.

Many thanks

dunstonh

My question is should I transfer all these into one pot as I am obviously being charged fees for each of these?

But are you paying more or less and are you getting more or less for the charges being paid?

Yes, you can consolidate but whether it is best to or not will depend on the contracts. You or an IFA will need to analyse the pensions for charges, terms, benefits, investments and features and compare them from there.

Loughton_Monkey

Almost certainly, you are getting 'charges' as a % of value on your pensions [not strictly 'fees']. So if all the charges were similar, then there is no financial advantage at all.

If you want to be 'neat and tidy' then the first thing to do is write down (for each pension) the fund(s) in which your money is invested, and the charges applicable to each fund.

You then should ask yourself a more important question: "Is this distrubution of money across such funds 'where I want to be'?" I strongly suspect you are in some hotch-potch of miscellaneous funds that seemed 'a good idea at the time'.

Only once you understand and decide the range/balance of funds that suit you, should you seek out good funds that have a decent charging rate, and [possibly] transfer the whole lot into that.

Just as an aside, I would point out that good financial management is not always 'tidy'. Even in the field of savings accounts. To save cash properly, many people need quite a range of products/suppliers. NS&I Inflation Bonds, Instant Savers, Cash ISA's [fixed rate and/or instant access], 2 year fixed term bonds, 1 year fixed term bonds, Limited Withdrawl accounts, Regular Savings Accounts.......

CannySaver_2

Hi

For each pension you would need to analyse:

1. Charges
2. Performance
3. Any guarantees that the scheme may have, e.g. guaranteed annuity rates, guaranteed maturity values
4. Alternative funds available

You would also need to then analyse the wide market to see if there is a cheaper / more suitable contract available, decide on an investment strategy and asset allocation and then pick funds / trackers in which to invest.

Doable, but a tall order for a novice investor, there is also the issue that many direct pension providers will not take in occupational transfers without an IFA sign off.

You need to decide whether you are a DIY investor or you need advice. If you are the former you need to do all the things outlined above for each of your pensions, if you decide you need advice then seek an IFA by getting a recommendation or using www.unbiased.co.uk.

Personally I would always use a fee chargign adviser, who you pay for the work, irrespective of whether a transfer results or not; that way you can be sure you are getting unbiased advice and he or she isn't just recommending a transfer to earn their percentage based fee.

I'd also agree with Loughton Monkey, in that "tidy" financial affairs are not always the best, it might for example be appropriate to leave a couple of your pensions where they are and transfer the rest, has to be a horses for courses approach.

The Canny Saver

kidmugsy

How old are you, OP?

superpennycounter

kidmugsy wrote: »

How old are you, OP?

I will be 37 this year :eek:

superpennycounter

Thanks to everyone - looks like I will be spending this Sunday looking through the papers. At least I know where to start now.

Wish me luck....

x