Employer Has Changed Pension Plan

efunc

Hi all,

I after some very generic pension advice. 5 years ago I signed up to the work Group Pension Plan which was with Prudential. My employer and I paid in 6% of salary to the Prudential Stakeholder/GPP during this period, however my work has just discontinued it and set up a new Stakeholder pension with Zurich this month. In general, without too many details at hand, would it be better to move the old Prudential pot, which I've built up over 5 years, to the new Zurich plan, or leave it where it is? What are the factors I ought to consider? Obviously both funds are subject to continued charges, and I don't envisage paying anything further myself into the old Prudential scheme any more.

For that matter I have been paying in a nominal amount (about £80 a month) into an Equitable private pension too for about 20 years. It's probably barely taken off ground. Would it be wise to consolidate them all into one plan for efficiency, or any other reason?

Thanks in advance

jamesd

Decide which investments you want to use. Find out whether they are available in those plans. Transfer to the new work one if that is the cheapest way to hold those investments. If the investments are not available consider a standalone personal pension and the charges for that. In the current market it's entirely possible to find that one person can get lower charges than a whole company group personal pension so it might be better to transfer from the Prudential plan into one of those rather than the new work one.

Before transferring it would be useful to wait for four to six months. There is currently price changing happen in the individual pension market and that may change the best deals significantly.

For the Equitable pension you should check for any benefits like guaranteed annuity rates. Those can be highly valuable, two or more times as high as the normal market rates available today. Growth in these plans can be low but the GAR can more than make up for that, depending on how old you are and how high the GAR is.

efunc

Thank you, that's very helpful advice.

I don't know anything about guaranteed annuity rates, so I'll do some research in that area and check my policy details. Thanks again.