What to do with 2 old pension funds

JohnnyJet

I have two pension funds, one from a previous employer and one where I opted out of SERPS.

The SERPS opt out one has a value of around £12,000 and a transfer value around £8,000. The other pension fund's current value is around £1,000 and was a salary sacrifice pension through a previous employer.

My question is can I transfer either of these two funds into another one and will it be beneficial to me? Could these be put into a SIPP? Does the transfer value mean that I would lose £4,000 if I were to transfer the SERPS opt out pension? Finally do I benefit from the 30 year cap on state contributions because I opted out of SERPS and am now back I it?

kidmugsy

How old are you? At age 60 you can draw the whole of up to two pension pots, each worth £2000 or less, under the "stranded pots" provisions. So it would be a pity to merge the £1000 pot if you are close to the opportunity to get the lot out.

P.S. You get 25% free of income tax and the rest is exposed to income tax.

JohnnyJet

kidmugsy wrote: »

How old are you? At age 60 you can draw the whole of up to two pension pots, each worth £2000 or less, under the "stranded pots" provisions. So it would be a pity to merge the £1000 pot if you are close to the opportunity to get the lot out.

P.S. You get 25% free of income tax and the rest is exposed to income tax.

I'm early 40's.

JohnnyJet

Oh and I forgot to say that I'm in the LGPS, can I move anything into that and if so is it worth it?

xylophone

Oh and I forgot to say that I'm in the LGPS, can I move anything into that and if so is it worth it?

http://www.lgps.org.uk/lge/core/page.do?pageId=102341

kidmugsy

JohnnyJet wrote: »

I'm early 40's.

Ah, then you'd expect the £1000 fund to be worth more than £2000 at age 60. But then the threshold may have been raised too. Probably it's all too far away to bother with this "stranded pots" argument.

JohnnyJet

kidmugsy wrote: »

Ah, then you'd expect the £1000 fund to be worth more than £2000 at age 60. But then the threshold may have been raised too. Probably it's all too far away to bother with this "stranded pots" argument.

Thanks, my only concern was that these funds might be better elsewhere, maybe in the LGPS?

kidmugsy

JohnnyJet wrote: »

Thanks, my only concern was that these funds might be better elsewhere, maybe in the LGPS?

It might be fruitful to start a new thread with that question in the title e.g. "Transfer old pensions into LGPS?" - that might attract the LGPS experts.

Daniel_Elkington

The stranded pots ruling only applies to occupational pensions. If this pension is a Group Personal Pension then the rule does not apply, however if it is money purchase then it does (confusing I know).

Call up your administrators (mouchel around my area) and ask them for a transfer in quote and ask for the assumptions they made in making that quote. At this point you may have to perform some arithmetic!

GhIFA

Daniel_Elkington wrote: »

The stranded pots ruling only applies to occupational pensions. If this pension is a Group Personal Pension then the rule does not apply, however if it is money purchase then it does (confusing I know).

You have been able to take up to two personal pension plans under £2,000 as lump sum since April 2012.

Daniel_Elkington

Yes, sorry, he's right:

http://www.pensionsadvisoryservice.org.uk/taking-payments-from-your-pension-pot/what’s-the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum

I must have missed that one! Thanks for setting me right.