Options when leaving

Saints2011

Good evening a collegue of mine has recently left his employment and has asked me several questions about various bits and bobs...

He contributed to a pension for a brief period of time. Now he's left the options are a Gross Refund of £371.94 or The Transfer Option of approx £1619.15 and the destination options are Occupational Pension Scheme or Personal Pension Scheme / Stakeholder Pension or Buy- Out Policy.

His new employer does not have a pension. Now obviously it makes sense to transfer the pension because it's worth a lot more with the employer contributions as well than just his contributions.

What's best? Where can he transfer it to - cheapest? We're both novices and he's under a timescale to give instructions to the Pension Adminatrations.

Thank you in advance !

xylophone

http://www.cavendishonline.co.uk/pensions/transfers-and-repensioning/ might be something here?

Saints2011

Thank you, just glanced over is the £70.00 competitive am a complete novice to Pensions.

What's the difference on this page with stakeholder pensions and personal? Ideally my ex colleague would like the option to pay into a pension again in the near future.

bilbo51

Saints2011 wrote: »

...am a complete novice to Pensions.

What's the difference on this page with stakeholder pensions and personal?

Start here: http://www.dwp.gov.uk/docs/ptb1.pdf

Saints2011

Thank you - any other opinions of where's best for him to put it would be appreciated

Saints2011

Looks like the Stakeholder would be the best route , any recommendations on Stakeholder pensions out there. Thank you

Loughton_Monkey

Saints2011 wrote: »

.....What's best? Where can he transfer it to - cheapest? We're both novices and he's under a timescale to give instructions to the Pension Adminatrations.

Thank you in advance !

In theory, go for the cheapest (lower charges) but don't get too hung up on this, especially for such a small amount. Stakeholders are limited to about 1%, and some of them offer some good funds.

But remember that the bigger driving force on growth will be the funds he chooses within the new pension.

If, as I expect, he is quite young, then avoid the 'safe' or 'cautious' funds because they won't provide longer term growth. There are no "right" answers. None of us has a crystal ball. Personally, for longer term growth, I always view the inevitable shift of wealth from West to East, and the inevitable growing shortage of natural resources.

This leads me, personally, to favour Asian, Emerging Market, and Natural Resourse funds for long term growth.

Saints2011

Loughton_Monkey wrote: »

In theory, go for the cheapest (lower charges) but don't get too hung up on this, especially for such a small amount. Stakeholders are limited to about 1%, and some of them offer some good funds.

But remember that the bigger driving force on growth will be the funds he chooses within the new pension.

If, as I expect, he is quite young, then avoid the 'safe' or 'cautious' funds because they won't provide longer term growth. There are no "right" answers. None of us has a crystal ball. Personally, for longer term growth, I always view the inevitable shift of wealth from West to East, and the inevitable growing shortage of natural resources.

This leads me, personally, to favour Asian, Emerging Market, and Natural Resourse funds for long term growth.

Thank you, I have looked at the Aviva option, do you think this would work for him, it states its a Balanced Managed Lifestyle Strategy so Im not sure if this is a better fund for longer term growth?

I can see it gives options to select certain funds, I cannot see anywhere that if he went for the standard balanced fund if at a later date he could change it to more riskier funds, without a fee or charge?

Hes 21.

Thank you

Saints2011

Saints2011 wrote: »

If at a later date he could change it to more riskier funds, without a fee or charge?

Ive now found this out. My only slight concern is that on the Cavendish website it states a regular amount of £20.00 or more or a transfer in is fine. But on the application form PDF & the Aviva website it seems you must initially pay £20.00+ per month even if you make a transfer in.

My friend would only want to transfer the money from his old employers pension to this pension and is not in the position at the moment I believe to pay £20.00 + pcm.

So I guess my question is will the lump sum be sufficent enough or will he have to pay in each month / year etc.

Thank you again..

taking_stock

stakeholders are fully flexible - even if you committed to £20per month, you can then phone them up to freeze your payments the followign month.
the most important point is to make sure that the sum is transferred rather than opting for the fractional cash in hand.
slightly aside from your question - are you sure they cant even afford £20pcm? it'd all be worth it in the end, particularly if they can later increase that.

dunstonh

My friend would only want to transfer the money from his old employers pension to this pension and is not in the position at the moment I believe to pay £20.00 + pcm.

No you dont. Stakeholders have no such requirement to do that.