Transferring to a 'New Generation Personal Pension'

jammerr

Hello,

Please bear with me, I have no clue about pensions.

I joined our companies pension scheme cuz I know saving for the future is a good thing and it has good benefits.

After a while or so there was an announcement that the pension plans were changing, you could stick with the current or scheme or transfer to the new one. (You had to pay more from your wage to do this) Everyone got the opportunity to speak to a pensions advisor.

I did this and he advised me to transfer to the new scheme as I'm only 26 and planned to move up in the company. The old pension scheme was going to be capped at 1%. (I'm paraphrasing here)

However, I couldn't transfer my funds directly to the new scheme since I hadn't started a pension for over 2 years so I have to put nearly 2k in a scheme with 'LifePlan' with Friends Life.

While filling in the forms I realised I have no clue what I'm doing, what rate am getting, whether it's worth me doing this, whether I might lose my money, should I just put it in an ISA instead? How do I tell? Am I able to get pension advice for free or do I have to pay? If I choose not to transfer this money it'll be paid to me directly. (And I'm sure the government will get their mits on it)

Please advise me. Thankyou.

dunstonh

Am I able to get pension advice for free or do I have to pay?

Advice is never free.

Can you explain the current scheme you have as it doesnt sound like a pension. The New Generation Personal Pension (or NGP) was a marketing name for friends Provident on their pension range. However, a Life Plan is the sort of name you would not associate with pensions but more with endowments.

xylophone

It seems that the OP joined the old scheme when he joined the company which was less than two years ago. The company has brought out a new scheme but will not allow the transfer of his contributions to this new scheme because he has been in the old scheme for less than two years.
He therefore has a choice of staying in the old scheme (but the company contribution is reducing) or starting afresh in the new scheme into which he will pay more of his salary but presumably for a higher company contribution?

If he transfers to the new scheme, he has the choice of either having his contributions to the old scheme refunded (less tax and NI presumably) or paying them into this "Life Plan". I wonder is it the same as this BBC pension offering?http://www.friendslife.co.uk/doclib/bpen137a.pdf

dunstonh

I wish companies would stick to fairly generic or consistent names. It makes things a whole lot easier if they did.

jammerr

xylophone wrote: »

It seems that the OP joined the old scheme when he joined the company which was less than two years ago. The company has brought out a new scheme but will not allow the transfer of his contributions to this new scheme because he has been in the old scheme for less than two years.
He therefore has a choice of staying in the old scheme (but the company contribution is reducing) or starting afresh in the new scheme into which he will pay more of his salary but presumably for a higher company contribution?

If he transfers to the new scheme, he has the choice of either having his contributions to the old scheme refunded (less tax and NI presumably) or paying them into this "Life Plan". I wonder is it the same as this BBC pension offering?http://www.friendslife.co.uk/doclib/bpen137a.pdf

Hello,

Yes, this is exactly it. Thanks for putting it much clearer than I ever could!

I have already transferred to the new scheme (CAB) which I did on advice of a pensions adviser, everyone got a free 15 minute advice session.

I was advised by him to transfer to CAB on what I had told him (planning on staying with company, hoping to get promoted in future)

He advised me to transfer the 2k to Friends Life, which I have taken steps in doing, the problem is I don't understand the rates, what it means, what could happen to my money. I don't understand the booklet and I've had to sign a few 'ARE YOU SURE YOU KNOW WHAT YOU'RE DOING' forms, and to be honest I don't. It's jargon to me.

Should I stick it in an ISA? Should I transfer to Lifeplan? Put it into shares? Invest it some other way?

Thanks for your help.

Lokolo

It's basically just another pension you can transfer your old pension to. You can choose the investments yourself or choose the lifestyle plan which will put them automatically in a number of different funds depending on how close to retirement you are.

http://www.friendslife.co.uk/doclib/mpen23q.pdf

The list of funds is here.

In an ISA you will have access to the money (could be good, could be bad) but you will have a wider range of choices of where to put your money.

You will also not get that whole amount as it will be taxed when you take it out of the pension.

jammerr

Thanks, I don't recall seeing this booklet.I'm guessing they provide a 'default' one unless you specify another?

My form is at work at the moment so cannot check exact rate.

I wouldn't be tempted to spend the money, I already have a few k I have invested and not been tempted to touch it. (It's at an awful rate unfortunately, I need to change that)