Transferring Pension fund

Bournemouth97

Question about Pension funds... I am 53, and am currently in a employers pension fund which is currently around the 300k mark...

Recently I discovered an old company fund that was frozen when I left, currently worth about 21k.

I was thinking of just transferring it to my existing fund as theres no charge, but are there are issues you know of doing this, or are there any advantages in keeping funds seperate ???

Appreciate your help

jamesd

If the frozen one is defined benefit like final or average salary, forget about it.

If it's money purchase, like those where you can choose investments, it's just a case of convenience or different investment choices and charges. For older plans, from before the year 2000 or so, there may be a guaranteed annuity rate that can sometimes be worth keeping.

Bournemouth97

Yes, its a Money Purchase scheme similar to my Employees current scheme, and from 2004 so dont believe theres any guaranteed annuity rate....

I plan to draw down 25 per cent of my fund when I am 55 in two years time, so if I had two funds would it be 25 per cent of both funds or the total value of both, assuming if I kept them seperate ??

232607

Check that the old fund doesn't have any valuable guarantees attached to it, IE its a straight forward DC pot.
Next thing is to compare the historical returns & annual charges of your old pension against your current one.

If it is a straight forward DC & the returns/costs look more favourable in your main pot the move it, otherwise don't.

Regards.

232607

Bournemouth97 wrote: »

Yes, its a Money Purchase scheme similar to my Employees current scheme, and from 2004 so dont believe theres any guaranteed annuity rate....

I plan to draw down 25 per cent of my fund when I am 55 in two years time, so if I had two funds would it be 25 per cent of both funds or the total value of both, assuming if I kept them seperate ??

25% of both funds

jamesd

From each pot you can take 25%. You can't add the two up and take it all out of one of them and none out of the other, though.

Bournemouth97

Ah, if its 25 per cent of EACH fund I may well leave it where it is in that case.... wasnt aware of that...thank you

green_man

Ah, if its 25 per cent of EACH fund I may well leave it where it is in that case.... wasnt aware of that...thank you

Not sure why you say this?

There's no difference in what you can take tax free whether you have them separate or merge them. If you merge them your one fund will be larger and you can thus access a larger tax free amount, so just the same as if separate.

232607

Bournemouth97 wrote: »

Ah, if its 25 per cent of EACH fund I may well leave it where it is in that case.... wasnt aware of that...thank you

You need to read my 1st post (No 4). These are the reasons to base your decision on whether to combine or not. The 25% TFLS would be the same value if you had 1 or 10 pension pots hence this is not a factor in the decision.