So I'm thinking of starting with a Stakeholder Pension but....

JuniorSherlock

Well I was an employee of the local council on two separate occasions so if I paid into the scheme both times (have emailed them to ask if they can trace my other employment period and if I made contributions then too) that would take me over 2 years.

If I have paid into the scheme for over 2 years, what do I do with it? And ditto if it's less than a year? I am assuming the quote for transfer may be more than the actual payments made into the scheme?

Obviously I can't still pay into it now can I? I haven't worked for the local authority since 1999.

Oh why does this have to be so darned complicated???

Thanks for the advice on taking payment out of the scheme, that might be cheaper for me to do.

I will lay all of this info before the IFA who may well regret taking me on! Mind you, I am doing a fair bit of legwork myself.

jem16

JuniorSherlock wrote: »

If I have paid into the scheme for over 2 years, what do I do with it?

Leave it where it is. You will become a Deferred Member with your pension worked out on date of leaving and increasing each year in line with RPI but now CPI. At normal retirement age claim the pension.

And ditto if it's less than a year? I am assuming the quote for transfer may be more than the actual payments made into the scheme?

If it's less and you have to take a refund or a transfer then take the transfer. Transfer value will take into account payments by you and employer so yes will be higher than what you paid into it. Only do this though if you cannot remain in the scheme.

Obviously I can't still pay into it now can I? I haven't worked for the local authority since 1999.

No you can't still pay into it.

JuniorSherlock

Thank you, you are being very helpful.

Right, so I need to tell them my new address. I assume that once I reach 65 they will contact me with instructions as to how to claim my pension.

If it turns out that I have only paid into the scheme for a year then I shall ask for a transfer as you have advised.

I'll also see what the IFA man says. At least now they know where I live and how to contact me so that's a bonus and a good morning's work :j

I wonder how much I have in there?

jem16

JuniorSherlock wrote: »

Thank you, you are being very helpful.

Right, so I need to tell them my new address. I assume that once I reach 65 they will contact me with instructions as to how to claim my pension.

Depends on the scheme's normal retirement age. I would contact them once you reach that age.

If it turns out that I have only paid into the scheme for a year then I shall ask for a transfer as you have advised.

It may not be a year. LGPS seems to say 3 months and you can keep your benefits there. Don't transfer it unless you are not allowed to stay.

I wonder how much I have in there?

You don't have anything in there as a defined benefit scheme doesn't have a pot of money. If you have been there for 2 years, you will have 2/80ths of your final salary. So if your final salary was £20k you would have built up a pension of £500pa plus a lump sum of £1500 (lump sum is 3 times annual pension). This will increase in line with inflation until normal scheme retirement age.

Perhaps have a read up on it if it was the LGPS?

http://www.lgps.org.uk/lge/core/page.do?pageId=102438

JuniorSherlock

Yes it was the LGPS and I think back in 1998 I was just a lowly admin assistant so my final salary would have been something crap like £12k pa (more than I'm on now mind, but then I'm part-time).

Still, every little helps as they say. If I can build up a pension pot now and have that added on top, it might just keep us out of poverty and afford a half decent standard of living.

gadgetmind

You may also like to look at the charges when starting a personal pension via Cavendish Online as this can be cheaper than going direct even when using the same pension company.

atush

ISAs pay on average 1% which is rubbish for a pension.

But that is a Cash ISA. Look into S&S isas in the future.

If none of the 3 IFAs wants to help you as your funds are too low, then look at Cavendish online. I would invest in a lifestyling find, something like Vanguard either 60/40 or 80/20. When your pot reaches 10K, you may find an IFA willing to take on the work.

JuniorSherlock

atush wrote: »

But that is a Cash ISA. Look into S&S isas in the future.

If none of the 3 IFAs wants to help you as your funds are too low, then look at Cavendish online. I would invest in a lifestyling find, something like Vanguard either 60/40 or 80/20. When your pot reaches 10K, you may find an IFA willing to take on the work.

I did look into Stocks and Shares ISAs with Hargreaves and Lansdown but to be honest I was nervous of starting one just in case the funds went down. I wasn't sure what to invest in and thought that I would be better off investing in some sort of stakeholder pension than a S&S ISA.

I will check out Cavendish since it's been recommended twice - thanks.

jem16

JuniorSherlock wrote: »

I did look into Stocks and Shares ISAs with Hargreaves and Lansdown but to be honest I was nervous of starting one just in case the funds went down. I wasn't sure what to invest in and thought that I would be better off investing in some sort of stakeholder pension than a S&S ISA.

So how are you going to choose your pension funds? They can go down too.

A S&S ISA and a pension has the exact same investments, only the tax is handled differently.

JuniorSherlock

Well yes, I realise that but I figured that a pension is specifically set up for long-term investment and if I chose the right one, would require very little input from me.

But now I'm being told that a Personal Pension may suit more and to be perfectly honest I've no idea what the difference is, if any. All these products sound the same, they all carry risks and yet setting up a Stocks and Shares ISA seems easier than a pension and you don't have anyone suggesting that you consult an IFA for that.

I would much rather set it all up myself and be £300 better off but as the system is made so complicated, I'd need to be an economics whizz to figure it out. Plus I don't want someone coming here trying to sell different financial products to me (he's already mentioned Life Insurance on the phone), but when you're faced with a bunch of products that all sound the same yet are somehow magically different, then I guess you have to hand over the cash and your trust to someone who for whom the differences are probably abundantly clear.

I am relying on this guy to choose my pension funds for me, rather than trusting myself with my very little knowledge of the shares index, to do it.