Pension with former employer

Wail

Six months after leaving my former employer, I have received a letter from the pension scheme offering either the money I invested after tax in cash or the whole pot if I transfer it to another scheme. This is triple the amount I would receive in cash so it is the most desirable option.

My new employers scheme does not kick in until a year after starting so I am a little lost with what to do with the whole pot. I believe that I need a private pension to transfer it into. Is that correct? How do I go about it? How do I avoid my pension disappearing in charges?

xylophone

http://www.cavendishonline.co.uk/pensions/transfers-and-repensioning/ any help here?

atush

yes, if you have no other pension (could be an old one) that you can tranfer into, then you need to open a PP. If you should then transfer that into your new work pension will be another question (and will depend on the charges and investments available to both).

you can go about it different ways, depending on your choices. You can open one online and pick your own investments and choose how much to add monthly.

Or you can go to an IFA (unbiased.co.uk) who will set up a pension and help yo choose the investments and help with the transfer, but there is a cost for this. If the cost is reasonable or not will depend on the type of pension you choose, and if you are going to deposit monthly on going etc.

IFA costs can be paid upfront, or thru the pension.

Cygnus_Alpha

Wail wrote: »

Six months after leaving my former employer, I have received a letter from the pension scheme offering either the money I invested after tax in cash or the whole pot if I transfer it to another scheme. This is triple the amount I would receive in cash so it is the most desirable option.

My new employers scheme does not kick in until a year after starting so I am a little lost with what to do with the whole pot. I believe that I need a private pension to transfer it into. Is that correct? How do I go about it? How do I avoid my pension disappearing in charges?

That is a very real concern with small pots of money. Have a look at stakeholder pensions. The max charge allowed is 1.5% per annum for the first 10 years and 1% thereafter. However the fund choice will be much more limited than say with a personal pension.