MSE News: Changing job? Your pension should follow you, Government says

jamesd

Edwardia wrote: »

My husband worked on tools for small companies for quite a few years and every time he would switch jobs they would refuse to pay into his existing personal pension and want him to use a different company. We figure they got commission from the pension company.

Not really that. It's just that it has long been traditional for a company to support paying into only one pension for the whole company, or maybe one for management and one for employees. Different from standard payroll where it's routine now to support direct deposit into at least one bank account per employee these days, not just have everyone get a cheque from one company bank that they have to cash or deposit individually.

Edwardia wrote: »

he still has a couple of personal pensions with not much in them.

The stranded pots rules mean that from age 60 he can take up to £2,000 out of up to two such pots; the total value of each pot must be no more than that £2,000.

Alternatively, he could transfer into another personal pension now if he wants to. Hargreaves Lansdown is one provider that will accept quite small individual transfers provided the total value being transferred in from all of them is at least £1,000 for a new customer.

Edwardia wrote: »

So if he could move those to his pension that would add more years and be useful.

Buying years might be limited to new pension scheme joiners but it is possible that he could do this.

Pincher

A "portable" pension pot sounds like a good idea, until you find out you are paying for everything, including the commission to the financial advisor. A colleague was made redundant in 1989, and started a new job, which had a wonderful final salary that paid 6~9% top-up, depending on the employee's contribution. A financial advisor talked him into a personal pension instead! Because it was more "portable". The company had no problems paying his salary into the personal pension, but NO top-up! So he loses 6%, pays the admin fee, which in turns pays his advisor's commission.

After ten years of this horror show, he finally enrolled into the company scheme, which abruptly ended because his division was sold to another company, which had a money purchase scheme.:eek: