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One small pension pot

I have a small pension pot from a stakeholder pension via a previous employer; the contributions (only 4 months worth) into it stopped in October 2011. The statement last July valued it at £3300 with a projected annual payout of £113/year in 2027, so pretty tiddly - is it worth transferring it into my current employer's group personal pension scheme? What things should I take into consideration before deciding? The average annual charge for it is 0.406% (I can't see any extra charges in the paperwork I have). The charge for my current employer's scheme is 0.48% of the fund value each year, plus 1% for the Balanced Model Portfolio, so at face value it looks better to leave it where it is, I guess, but just want to make sure I'm considering it from all angles.

I also can't remember if the old stakeholder pension was via salary sacrifice; if it wasn't, am I still within the timeframe to reclaim any extra tax relief on the contributions?
"Save £12k in 2019" #120 - £100,699.57/£100,000

Comments

  • jamesd
    jamesd Posts: 26,103 Forumite
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    There is no extra tax relief to claim for salary sacrifice. If it was paid by salary sacrifice you received the relief in the form of lower NI in your normal monthly pay, so it's already been taken care of.

    Were you a higher rate tax payer? If you were, it'll matter whether it was salary sacrifice or not because salary sacrifice would have automatically given you the higher rate income tax relief. Not using salary sacrifice usually wouldn't have.

    To move or not, you consider the investment range and charges. If the investment range meets your needs and the charges are lower you'd leave the pot where it is or even look at moving some money from the pot at your current employer to the old one.
  • dunstonh
    dunstonh Posts: 118,602 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    is it worth transferring it into my current employer's group personal pension scheme?

    If it is better to do so then yes. If not, then no.
    What things should I take into consideration before deciding?

    Charges, investment options and features.
    The average annual charge for it is 0.406% (I can't see any extra charges in the paperwork I have).

    That is good.
    I also can't remember if the old stakeholder pension was via salary sacrifice; if it wasn't, am I still within the timeframe to reclaim any extra tax relief on the contributions?

    You dont get to claim anything extra. It happens at source.
    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.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
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    Tiglath wrote: »
    if it wasn't, am I still within the timeframe to reclaim any extra tax relief on the contributions?

    Were you a higher rate tax payer? If not, nothing extra to reclaim. If so, then you *might* be able to claim something for the final year.

    http://www.pensionsadvisoryservice.org.uk/news/2012/march/higher-rate-tax-payers-and-pensions-tax-relief--a-reminder
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • Tiglath
    Tiglath Posts: 3,816 Forumite
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    Thanks - yes I was a higher rate taxpayer; I'll look into it.
    "Save £12k in 2019" #120 - £100,699.57/£100,000
  • Tiglath wrote: »
    Thanks - yes I was a higher rate taxpayer; I'll look into it.

    Hi . . . I was a higher rate tax payer paying personal contributions into my company pension plan. The pensions people only claimed back Base Rate tax on my payments, whereas they should have been collecting the higher rate . . .!!!
    Therefore I was owed 20% on my contributions, which I am in the process of reclaiming. They have changed the rules in that I can only claim back for the last 4 years instead of 6 . . . (Dammit!:mad:)
    However, the tax office were quick to payout for the first 3 years, 2009~2012:T, but they are taking a bit longer on the remainder:(.
    I will be contacting them on Monday to get an update on the situation.
    Although it may not directly affect this post, I thought this would be a good topic to highlight relating to pension schemes.
    Maybe Martin Lewis should make a note of this in his show . . . :o
  • Tiglath
    Tiglath Posts: 3,816 Forumite
    Tenth Anniversary 1,000 Posts Combo Breaker Debt-free and Proud!
    Thanks, tcurtis - did they pay it to your pension people, or did it come to you? If to you, did they just adjust your current tax rate to account for it?
    "Save £12k in 2019" #120 - £100,699.57/£100,000
  • It doesn't go to the pension it becomes an adjustment in your tax code. The pension companies only ever give 20% relief and the rest is up to you (as they would have no way of knowing what kind of a tax payer you were).

    If you want it to end up in the pension then you need to actively put it in.
    Thinking critically since 1996....
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    tcurtis542 wrote: »
    The pensions people only claimed back Base Rate tax on my payments, whereas they should have been collecting the higher rate . . .!!!

    Dunno who "pensions people" are but they *cannot* claim back anything more than basic rate. Claiming the extra 20% is your job, and your job alone.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • bigadaj
    bigadaj Posts: 11,531 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper
    gadgetmind wrote: »
    Dunno who "pensions people" are but they *cannot* claim back anything more than basic rate. Claiming the extra 20% is your job, and your job alone.

    To be fair to the earlier poster pension contributions may be taken before tax, so an automatic claim for any tax is tied into the contribution at their highest rate.

    This doesn't absolve anyone of checking and taking responsibility though.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    bigadaj wrote: »
    To be fair to the earlier poster pension contributions may be taken before tax

    The earlier poster wasn't sure whether they'd paid by sal sac or not. If not, then yes, extra should have been claimed via tax code or tax return.

    The more recent poster has already made one backdated claim so was definitely paying post tax, definitely paying tax at 40%, and didn't realise that pensions providers can also reclaim basic rate with the rest being down to the tax payer.

    And yes, you can't now go as far back when claiming backdated overpaid tax in this way.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
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