What to do with <2yr pension CEV 28 October 2012 at 10:18AM edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning 2 replies 493 views

Glastoun

I left a job after 18 months, which is less than the 2-year minimum for the DB pension to kick in as a proper pension. I can either take my payments back out, paying tax & NI, or I can get a CEV transfer of probably around £4k, which is a lot more than I paid in out of my salary so seems like the best option.

I don't know where to transfer this to though - probably a personal or stakeholder pension? Ideally something with low fees and low risk - if I could, I'd put it into an ISA, if that gives you an idea of my risk profile.

Any suggestions on where to look for suitable products?

Ta,

dunstonh

if I could, I'd put it into an ISA, if that gives you an idea of my risk profile.

Pensions and ISAs share virtually the same investment options. So, risk profile doesnt come into it. However, if you mean cash ISA, then you would probably be increasing the risk not reducing it. You would be replacing investment risk with shortfall risk and inflation risk. One option means you may not get the returns you require. The other guarantees you wont get the returns you require.

Any suggestions on where to look for suitable products?

As you say, a stakeholder pension or personal pension is most likely best. You will probably find most firms require an IFA to sign off on it first though.

xylophone

You will probably find most firms require an IFA to sign off on it first though.

I should think this would certainly be the case if you had the option of leaving it as a "deferred" pension but as it is a case of return of contributions or transfer perhaps not. You'll need to enquire.
http://www.pensionsadvisoryservice.org.uk/workplace-pension-schemes/final-salary-schemes/options-on-leaving-your-employer

Cavendish won't normally deal with DB pensions but in this type of case it might be worth an enquiry.
http://www.cavendishonline.co.uk/pensions/transfers-and-repensioning/