Transfering into NEST

Saddler1975

Hi, Newbie poster but have been a regular visitor to get hints and Tips.

I hope someone could clear something up for me.

I worked 8 years for Royal Mail and during that time contributions from my wages were put into the P.O.P.S (post office pension scheme). During that time I amassed a very modest Pension Pot worth just over £2k but as I do not work for the R.M anymore I can no longer pay into that scheme. After speaking to someone today and talking about being enrolled into NEST he suggested transferring my Post Office Pension into my NEST Pension.

I have gone onto the NEST Website and all I could find was the following:-

1. The Pension had to be an occupational pension scheme. Tick

2. The money from your previous workplace pension will only be available if you were a member of the pension scheme for less than 2 years.

So without trying to be thick (not easy for me) does that completely rule out me being able to transfer over my Post Office Pension? or am I looking in the wrong place? or got my wires crossed somewhere?

Thankyou in Advance

greenglide

The post office pension scheme will be a Defined Benefit (final salary) scheme.

This means that you do not have a "pot of money" what you have is a promise to pay you an amount of money when you reach the scheme retirement age (probably 60).

The amount will be increasing with inflation until you start to draw it and it will increase with inflation in payment and probably a survivors pension should you pre - decease a spouse.

You really wouldn't want to leave this scheme, would you?

kidmugsy

Saddler1975 wrote: »

I worked 8 years for Royal Mail and during that time contributions from my wages were put into the P.O.P.S (post office pension scheme). During that time I amassed a very modest Pension Pot worth just over £2k

Presumably you mean that it guarantees you a pension worth £2k p.a., index-linked? It's not at all likely to be to your advantage to give that up.

Saddler1975

Hi Greenglide Thankyou for your reply.

You have answered my next question which would have been, will my P.O.P still be working for me? So the clear answer is yes.

So what would my new wife (who is nominated on the pension) receive if anything happened to me? A lump sum? Annual payment or both?

Saddler1975

kidmugsy wrote: »

Presumably you mean that it guarantees you a pension worth £2k p.a., index-linked? It's not at all likely to be to your advantage to give that up.

Yes sorry an annual payment of £2k, my error sorry.

kidmugsy

Saddler1975 wrote: »

So what would my new wife (who is nominated on the pension) receive if anything happened to me? A lump sum? Annual payment or both?

You'd have to check the T&Cs - if you don't have a copy perhaps you can visit their website?

But a typical scheme would pay a widow's pension equal to 50% of yours.

You should also check the T&Cs to see whether the scheme will pay you a lump sum as well as an annual pension: some do, some don't.

kidmugsy

Would this help?
http://www.royalmailpensionplan.co.uk/4/section-ab

Saddler1975

Many thanks, will have to do some jargon busting and see if I can understand any of it lol

kidmugsy

Saddler1975 wrote: »

Many thanks, will have to do some jargon busting and see if I can understand any of it lol

I read far enough to see that you can also expect a lump sum of three times your annual pension. I didn't get far enough to see the widow's pension. Often there's also a guarantee period. For instance, in some schemes they pay extra to your widow if you die within the first five years of starting the pension. Good luck with your homework.

jamesd

You can't transfer into NEST. Transfers in aren't allowed and transfers out aren't allowed until at least age 55. Not being able to transfer in to NEST is fine, since the desirable thing to do is transfer out, not in.

The only significant reason to use NEST is if you're unlucky enough to have an employer which uses NEST and also provides some employer matching or salary sacrifice arrangement. Otherwise NEST is best avoided because of its combination of relatively high charges and low range of investment choices that aren't very good either.

Saddler1975

jamesd wrote: »

You can't transfer into NEST. Transfers in aren't allowed and transfers out aren't allowed until at least age 55. Not being able to transfer in to NEST is fine, since the desirable thing to do is transfer out, not in.

The only significant reason to use NEST is if you're unlucky enough to have an employer which uses NEST and also provides some employer matching or salary sacrifice arrangement. Otherwise NEST is best avoided because of its combination of relatively high charges and low range of investment choices that aren't very good either.

I'm an unlucky one but I could have opted out if I was aware of the high charges at the time. I've read that you cannot transfer out but also read that their charges are no where near the cheapest yet no where near the dearest either. Think I also read their charges will be quite high for another 15+ years until the original set up costs are paid for.

Also read that nest will be one of the biggest if not the biggest Pension Provider and estimates it will have between 3.5-5 million investors.