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Pension advice sought please

PeterBaker_2
Posts: 1 Newbie
I've been saving in a stakeholder pension scheme for 8 years with my former employer but have left that job. I am now employed by the government and on a final salary pension scheme whereby you accrue years up to a maximum of 35/70. I enquired about transferring the rights of the stakeholder pension to the new pension and was told the fund has a transfer value of £25,000. The government pension people have offered me just under two years worth of transfer rights if I move it across.
I have been told it's better to have all your money in one place but the stakeholder pension forecast payout seems quite good. However, I am not sure it makes sense as I won't be paying into that fund anymore and it won't be growing although charges will be applied still.
Can anyone advise which would be the best option?
I have been told it's better to have all your money in one place but the stakeholder pension forecast payout seems quite good. However, I am not sure it makes sense as I won't be paying into that fund anymore and it won't be growing although charges will be applied still.
Can anyone advise which would be the best option?
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Comments
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I have been told it's better to have all your money in one place
Who told you that? It is irrelevant where you hold it. In some cases, it can be better to hold things apart and sometimes combined. There is no hard and fast rule.but the stakeholder pension forecast payout seems quite good.
How does it compare on a like for like basis. Like for like is important.However, I am not sure it makes sense as I won't be paying into that fund anymore and it won't be growing although charges will be applied still.
Charges are irrelevant whether you pay in or not as they are not dependent on your contributions.Can anyone advise which would be the best option?
Not without facts that you are probably going to be unwilling to post the internet. That said, if you compare on a like for like basis using reasonable assumptions, it shouldnt be too difficult to see which is likely to be the better one.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Your stakeholder fund will continue to increase in value in line with its investments, hopefully significantly more than the charges.
Whether its worth swapping £25K now for 2 years final salary depends on the details eg number of years until retirement, likely final salary, investment returns. Some of these may be known now but most will be guesses. One advantage of transferring is that it does give you some certainty about your retirement income.0 -
If you have reasonable hopes of lots of promotions then a transfer might look attractive. Perqs such as life insurance might add to the attractions. But if the case looks evenly balanced I'd incline to keep the pensions separate, because of the benefits of diversification (in a broad sense): in this case, for example, you'd probably be able to take the stakeholder pension earlier at age 55.
You might also like to weigh up the consequences if you should die without drawing the pensions. Final salary: more generous terms for your widow if you have transferred (I assume). Stakeholder: whole pot available to your widow as a tax-free lump sum, without the delays of probate.Free the dunston one next time too.0 -
I agree with kidmugsy, depends on your current and likely Final/average salary if to transfer or not.
The only stakeholder can be used from age 55 though, so can help you retire earlier than your scheme age.
What is the scheme age? When do you want/expect to retire?0
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