What do I do with a frozen pension plan?

adepick

Hi,

I contracted out of SERPS when I started a new job in 1988. My payments (plus other incentives at the time) were paid into a Norwich Union Personal Pension (Av with Profit Guaranteed). I have never paid any additional contributions into it and, after recently ringing Aviva, I have been informed that no further contributions are (SERPS or personal) ar permissible. The accont balance is about £16.5K. I can transfer it to another pension or SIPP but not into my new job's pension plan (new job won't allow it).

Aviva informed me that the SERPS Pension has a clause guaranteeing to pay a minimum of 4% growth per annum with a management charge of 0.875%. Now a guaranteed growth of 3% is great, but i cannot add any contributions to it!!!!

So, should I leave a small pension pot to grow at a guaranteed 3% per annum (that will pay less than £1K pa when I'm 65!), or should I move it to a pension plan where I can add further contributions but with no guarantee of growth?

adepick

Jack_Griffin

Did you keep your annual pension statements? If you did you can quickly see what actual growth has been like, it may be somewhat more than 3.25%..

adepick

Yes, I have.....the last few years it has been at 3.125% growth, but there have been fits and starts in the past.

Shiny_button

If you see an independent financial advisor they will help you. It requires a technical analysis for anyone to give you with the most accurate prediction available.

Everything else is guesswork

GlynD

Transfer your Serps contributions into an active pension plan where the fund value will attract extra interest. That's what I did.

jem16

GlynD wrote: »

Transfer your Serps contributions into an active pension plan where the fund value will attract extra interest. That's what I did.

The fund value will not attract any interest as that is not what investment funds do.

OP it's perfectly possible that you will achieve greater growth but you would need to take more risk to do so. If you feel happy to take this risk and make choices yourself then transfer it.

Otherwise you have 2 choices;

1. Leave it where it is and start an additional pension for your contributions thus ensuring at least 4% growth. Are you contributing to your company pension?

2. See an IFA to get advice although value is a bit low to perhaps make this worthwhile.

adepick

jem16 wrote: »

Otherwise you have 2 choices;

1. Leave it where it is and start an additional pension for your contributions thus ensuring at least 4% growth. Are you contributing to your company pension?

2. See an IFA to get advice although value is a bit low to perhaps make this worthwhile.

Re my choices: I have a military pension which is paying out now and have just started a new job and have the opportunity to join their scheme (the latter is the subject of another thread I've started).

Think an Ind Financial Adviser sounds like a plan....but don't I have to pay a fortune to consult with one of them these days?

adepick

jem16

adepick wrote: »

Re my choices: I have a military pension which is paying out now and have just started a new job and have the opportunity to join their scheme (the latter is the subject of another thread I've started).

As said on your other thread, you would be mad not to join it.

Think an Ind Financial Adviser sounds like a plan....but don't I have to pay a fortune to consult with one of them these days?

adepick

You will have to pay them for advice yes. It's no dearer nor cheaper than it was before.

adepick

jem16 wrote: »

As said on your other thread, you would be mad not to join it.



You will have to pay them for advice yes. It's no dearer nor cheaper than it was before.

Thanks for both bits of advice.

kidmugsy

You could look on the >3.25% as a conservative investment in your range of pension pots, and balance it with riskier stuff elsewhere.

GlynD

adepick wrote: »

Re my choices: I have a military pension which is paying out now and have just started a new job and have the opportunity to join their scheme (the latter is the subject of another thread I've started).

Think an Ind Financial Adviser sounds like a plan....but don't I have to pay a fortune to consult with one of them these days?

adepick

If your military pension is paying out now then it obviously can't be added to but the pay office and Xaffinity would have explained that to you. Most financial advisors offer a free consultation service. They make their money from commissions on whatever financial transactions they make for you.