Is it worth transfering old pension pot over?

krashovrload

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I've started a job within the Local Council and have been automatically enrolled into the LGPS and I have about 6 years worth of pension contributions from a previous scheme (with Avia) which I have looked at moving across.

I've received the notification back from our pension dept and they say that my previous pot is worth a little over 2 years when transferred over.

Is it worth transferring pots around? What happens if I don't do anything.?? I don't know very much about pensions.

Thanks in advance.

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dunstonh

Is it worth transferring pots around?

Possibly. You would need to compare what you are giving up against what you are gaining.

What happens if I don't do anything.??

Nothing. Your existing pension will remain invested and continue as before except you wont be adding to it.

I don't know very much about pensions.

They are like many other retail products. Lots of versions and differences which mean you cant give one-size-fits-all answers a lot of the time.

We had a post in this section where someone transferred an Aviva pension to their new works one and clearly didnt understand what they were doing and are now having a whinge about it. So, it isnt something that should be done lightly. However, there is a good chance that transferring it will be the best option. So, do take a look.

atush

You do need to look at the old pension, how much is in it, and how much it costs and has been performing.

given you haven't said what it is worth now, nor your salary at your new job, IMHO a FS/Career avg one is preferable and is likely to be a good idea to transfer. But you need to do the work, and not dilly dally too long. You will have a limited time after you start work that you are allowed to transfer in any former pensions.

We have someone on another thread here complaining bitterly he did not do so at the time he was able to.

krashovrload

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Thanks for that - I've got to submit authorisation by 14th June so I'll give it some serious thought..

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atush

If you give the figures, soneone here might say if it is worth it.

Or, you can look at projected benefits at retirement from your last statement (ie y) and compare it with your LGPS benefits (ie 2 yrs* 1/80/ or 1/60s or whatever it is * yr salary= x

See which is higher (i suspect x)

krashovrload

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Thanks again - I don't have all the figures to hand at the moment but I'll dig them out later.

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hyubh

krashovrload wrote: »

Is it worth transferring pots around?

One thing to keep in mind is that completing before April 2014 would mean you get a service credit against a final salary pension. As such, its monetary value will go up (or stay static) with the rate of pay in your current job.

Conversely, transferring would also mean the normal retirement for the service credit bought will be the normal retirement age for the final salary part of your LGPS pension generally (65) - while you can choose to draw an LGPS pension earlier, it would suffer reductions as a result. Further, the post-April 2014 part of your LGPS pension will have a normal retirement age tied to your state pension age, and you won't be able to draw the final salary part separately. That said, drawing benefits early might not be something you are interested in doing anyhow.