To transfer or not to transfer ?

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
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dabe1971dabe1971 Forumite
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Hi all,

Looking for some advice with regards to a 'dormant' pension pot and what to do with it.

Years ago I contracted out of SERPS (I know...) and as a result I've accrued a fund of £25,425.82 in a ReAssure pension. I know this will no longer be added to due to changes in payments etc.

According to my annual statement received today it has a transfer value of £21357.00

Now since 2006 when I started a new job I've been paying into a Corporate scheme at 3% which the company matches, a year ago I upped that to the maximum company contribution rate of 6% where I intend to leave it. I have no other pension provision.

Currently my fund there stands at £18,855.24

I've no plans to leave the company so this may well be my final job until I retire at whatever date in the future. I'm 42, single, no dependents and no plans for any.

Now it may be a no brainer but I thought I'd ask the experts here for opinions, given my SERPS pension no longer receives contributions, would I be best of taking the 4k hit and transferring it into my active pension pot ?

Is that possible without any further penalty ? And if so, what's the procedure ? Do I just advise my current provider and they take care of it or is it something I need to sort myself ?

Given those figures, am I in a healthy position given I'll probably work until state retirement age ?

Thanks in advance of any replies.

Replies

  • dunstonhdunstonh Forumite
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    Years ago I contracted out of SERPS (I know...)

    What is the "i know..." mean? I am guessing it was a decision you are now rather pleased about.
    Now it may be a no brainer but I thought I'd ask the experts here for opinions, given my SERPS pension no longer receives contributions, would I be best of taking the 4k hit and transferring it into my active pension pot ?

    When the cost/benefit analysis has been done, which comes out best?
    Do I just advise my current provider and they take care of it or is it something I need to sort myself ?

    You request discharge forms from the old provider and ask for an application to transfer in for the new provider. The new provider may or may not accept transfers in or may required you to use an adminstrator/adviser/intermediary depending on scheme rules and requirements.
    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.
  • atushatush Forumite
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    You need to see about this old pension, and what the costs are, and if there are any attached guarantees.

    as for current contributions, I assum it is 6% each so 12% overall? Not bad but possibly not enough. Certainly not enough to retire before SRA. But if you are happy to work to 67/68 then it could be enough.

    All depends on what you consider your min for keeping up your current standard of living. Have you tried a retirement calculator?
  • You may also have the option to be able to make your own contributions into that pension to build it up. Might be worth checking if you can, and if so, if you think it's worth doing so.
    “In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing at all.” - Roosevelt
  • jamesdjamesd Forumite
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    dabe1971 wrote: »
    Years ago I contracted out of SERPS (I know...)
    Hopefully you know that it was a good decision that has been made even more good by the flat rate state pension changes.

    With the flat rate changes a person stops accruing more state pension entitlement when they reach the maximum flat rate level. For a person in the new system all their life and not having contracted out this would be after 35 years. All years of paying NI after that get them no more state pension. Those who contacted out get a lower foundation amount and just continue accruing more state pension entitlement after those who didn't contract out stopped accruing more.

    Since you're now 42 you'll end up with both the contracted out pension pot and the full flat rate while a person who didn't contract out would get just the state pension. Assuming you continue to work long enough to get to the full flat rate.
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