Total pension novice.....

Maybeanotherday

Hello everyone, Im a total novice where pensions are concerned... and Im asking for advice on my husbands behalf!
So his work use independent financial advisors and we have a letter stating that he has two standard life pensions on the go...The letter from the financial advisor states that the new scheme has lower charges of 0.75% annual management rather than 1.3%.
The letter goes on to ask if he would like to
A) leave it as it is
transfer the one pension into the new pension
C) transfer into individual pension plan

For the pleasure of getting them to put the two pensions together they want £75 off my husband

The pension is "standard life managed pension fund" with an assumed growth rate of 3.5

Can anyone help give me an idea if this is a good plan and what we can or cant do with it thankyou

jamesd

He almost certainly the Standard Life Group Personal Pension. The default investment in that pension is the Standard Life managed pension fund that you mentioned but he has plenty of other options.

It's worth combining the two if the older pension pot has a value higher than £3,000 which would have a break even time of about five years. Smaller values would also pay, just take longer to break even. Larger values would pay off sooner.

This pension has some quite good investment options that he could use if he was familiar with investing. For example, it has a global tracker fund. That would be expected to grow by maybe 1-1.5% more per year but to have bigger ups and downs along the way, like a roller coaster in reverse. A global growth fund might drop by 40% once or twice a decade, 20% two or three times. But on average even with those drops it would be expected to grow more. The balanced managed fund might drop by 25-30% or 15% in the same market conditions. If he can stomach that sort of higher up and down movement the change would probably make him better off in retirement. Not everyone can even though it's just normal for what stock markets do.

You can have something like ten different funds from their range at the same time with this plan if you want to, assuming it's what I think it is.

Maybeanotherday

To be honest we are both total novices with pensions, I have an NHS pension so have just bubbled along with that. This pension he's only paying a minimal amount into.
Its currently got £3,877 in it.

dunstonh

So his work use independent financial advisors and we have a letter stating that he has two standard life pensions on the go...The letter from the financial advisor states that the new scheme has lower charges of 0.75% annual management rather than 1.3%.

That makes sense with the 0.75% cap coming in.

For the pleasure of getting them to put the two pensions together they want £75 off my husband

That is reasonable.

Can anyone help give me an idea if this is a good plan and what we can or cant do with it thankyou

0.75% is cheaper than 1.3%. However, beyond that, most of the things will be the same. Both will have similar investment options as they are both Std Life. Indeed, the newer version may actually have a better range. However, with the current balance, the default will probably be fine.

xylophone

This pension he's only paying a minimal amount into.
Its currently got £3,877 in it.

If he pays more into his pension, will the employer match his contribution?

Maybeanotherday

Hi Im not sure I dont think they do to be honest I think it's about £10 a month they put in and he puts in £30?

Maybeanotherday

also could we not combine them ourselves without the need to pay someone for the pleasure?

xylophone

Hi Im not sure I dont think they do to be honest I think it's about £10 a month they put in and he puts in £30?

He should check- there is no point in losing any employer contribution that may be available.

If he wants to stay with the employer arrangement he'll need to pay the admin fee I should think.

If there are no additional employer contributions, he could still contribute more or open a pension of his own - a stakeholder might suit?

http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief