Who makes the money? (not me!)

waycombe

So I'm transfering pension funds from one place to another. Then I start thinking to myself it's going to take up to 14 days or so from the time the fund stops attracting interest (or whatever) in one account until it starts getting interest in the new account, this is happening with MILLIONS of pounds every week somewhere or another, the Banks themselves still have it on deposit until it's transfered (it takes a few days for a cheque to clear) so my question is what happens to the interest in between times? The acctual money is somewhere all the time, someone is making out of it, it should be ME! it's my money!

I'll be very interested to hear your views;)

dipsomaniac

the majority of the time taken will be administration (processing discharge forms, applications etc). once your existing scheme is happy that your pension is being transferred to an appropriate scheme your holdings will be sold, a cheque drawn, and sent straight to your new provider. the amount of time that you are dis-invested should be no more than a couple of days - nobody is making money as your pension is in the form of a cheque.

dunstonh

Then I start thinking to myself it's going to take up to 14 days or so from the time the fund stops attracting interest (or whatever) in one account until it starts getting interest in the new account,

Pension funds dont earn interest.

this is happening with MILLIONS of pounds every week somewhere or another, the Banks themselves still have it on deposit until it's transfered

No they dont.

Pensions are typically made up of investments. These investments have to be sold and a cash value realised. This takes you out of the market and the funds are usually transferred within 24 hours to the new provider. They will buy units in the new investments at the next available dealing point. For most funds that will be next day. It may take them a week or two to send the documents out but the purchase price is normally the date they get the cheque.

The only bit you are really losing out on is the few days that you are out of the market whilst it's in the post. If the markets go up in that time, you lose out. If the markets go down in that time you gain.