Are pension funds taxed when transferred?

rudebadger

Hi. No its a money purchase scheme. Thanks

kidmugsy

rudebadger wrote: »

pot with old employer is 6 figures.

That's enough to justify seeing an IFA, I'd have thought, if you are not au fait with pensions.

A question: why do you want to transfer to your new employer's scheme rather than to some sort of personal pension? I ask because I like the idea of being diversified across more than one provider.

I suppose I should also point out that I understand that if your DC old employer pension is organised in the usual way, it should be safe from your old employer going bust.

Have you got figures for the annual charges of the two different pensions?

jamesd

In a money purchase scheme your money is entirely apart from your employer as soon as the monthly payment has been made. You do not need to worry about it somehow suffering if your employer becomes bankrupt. Your old employer simply can't get at the money and nor can any creditors. It's yours. It's safe.

There is no underfunding risk as there is with final salary or other defined benefit pensions. Nor is there any risk of Maxwell-style major losses since those gaps were closed long ago.

So the key reason for your move is gone. However, it is worth considering the available investments and charges. As a practical matter if Towers Watson are involved in a DC scheme you probably have access to some inexpensive tracker funds that would be both good for the type and cheaper than the same thing at HL. HL is too costly for the sort of pot size that you're considering moving, their 0.45% annual cost adds up. However, you could ask them if they are willing to offer a charges cap if you were to move the money and that may save you something. Probably not enough to be worth doing.

If you don't want to change the investments much there are some lowish cost alternatives for the money that charge a low fixed fee and dealing charges, which won't matter if you don't trade much.