Should I transfer my small pension?

SKM132

Hi,
My company have recently switched pension provider meaning I have a small amount in the previous scheme but am now paying into the new scheme. I have only been paying into the pension for two years so the amount in the previous scheme is very small (circa £4k). Both are salary sacrifice schemes.
The company are currently offering a free transfer of this amount to the new pension provider who have smaller admin fees - however, i am unsure if it is worth it or not?
Can anyone help me understand the pros and cons of switching?
Thanks in advance

kidmugsy

There are two different questions here.
(i) Should you transfer your old pension? That depends on whether you can find a different provider who offers some feature (e.g. lower costs, more choice, being a mutual ...) that you would prefer.

(ii) If you do want to move it, is the new occupational scheme the obvious place to move it to? Here it's potentially a matter of comparing the new scheme with lots of other alternatives. You might be swayed by the sheer convenience of it: only one annual report to read, only one scheme to whom to report every change of address, and so on. Your shout.

katsu

Had a similar situation and came up with this list. Hope it helps and will be interested to see what replies this thread gets.

Pros of switching:

• benefit from the reduced charges on your whole pension pot
• only one set of paperwork each year not two (as kidmugsy says). Only one company to keep in touch with if you move etc. I think this isn't a huge issue if you are organised.
• no charges for the switch

Cons of switching:

• funds may not grow as well with new provider as old one (they may grow better or worse so this could be a pro). Depending on how much the saving is from the reduced charges, the new provider has to do that much worse before you actually lose out IYKWIM.