Merging smaller pension accounts

njd19

Hi all,

I was wondering if anyone could offer me any advice.

Basically, over the years my wife has worked for numerous city banks and has always been in their company pensions schemes. When she has left and moved on, her pensions polices just get frozen.

She now has 4 frozen pension policies Her last firm has said she can stay in their pension scheme but since she is no longer an employee will have to start paying fees.

My question is, is there anyway these little pots can all be put together in a private pension policy so that when she moves job she can transfer the value in her pension fund to that rather than leave it frozen.

Also, can anyone offer advice on wether this is a good idea or is it better to leave frozen in the separate schemes?

Thanks & regards!

dunstonh

My question is, is there anyway these little pots can all be put together in a private pension policy so that when she moves job she can transfer the value in her pension fund to that rather than leave it frozen.

Yes.

Also, can anyone offer advice on wether this is a good idea or is it better to leave frozen in the separate schemes?

Depends on the scheme. Generally, final salary schemes are best left where they are. Money purchase schemes don't normally have retained benefits and can be moved around without concerns about loss (generalisation).

EdInvestor

So step one is to find out what kind of pensions they are: final salary (don't move) or money purchase ( this kind could either be occupation pensions or personal pensions, but this doesn't usually matter in terms of whether they can be moved) .

njd19

Thanks for the advice.

Her main pension is with Prudential (where she used to work) and I think it is a final salary scheme.

Her new firm (which is much smaller) operate their pension scheme via Norwich Union so would that suggest it's not a final salary scheme?

Regards

EdInvestor

You might have a misconception about what "frozen" means.

njd19 wrote:

Her main pension is with Prudential (where she used to work) and I think it is a final salary scheme.

For instance with this one, the income she will get at retirement will be rising by inflation or 5% p.a. if it is a final salary scheme (almost certainly is)

Her new firm (which is much smaller) operate their pension scheme via Norwich Union so would that suggest it's not a final salary scheme?

Yes. But old money purchase schemes remain invested, that are not just sitting there doing nothing. She needs to monitor how old M/P schemes are performing and this does mean it's usually better to consolidate them in one place ( possibly,though not necessarily, the scheme run by the current employer).

What funds are offered by the NU scheme and what charges is she paying? You need to compare these two aspects at all the M/P pensions.