Multiple pensions - what to do?

Anomaly100

My husband has two pensions both of them are defined contribution schemes. One has a pot of £15k and is currently not being added to. He has another pot of £25k which he is still contributing too along with his employer.

So presumably he could transfer the £15k pot into the pension he is still contributing to to make a total pot of £40k. How do we work out if that's a good idea?

Currently he's paying 15% of his salary into his pension so the £25k pot is likely to grow significantly over the next few years. How do we know if he should be putting money into this one? He could revert to putting 6% into this one and then put the additional into the first pension or another pension altogether?

Is this worth getting proper financial advice for? If so who?

I feel a bit at a loss to be honest it all seems like complete guess work.

bigadaj

For most people the two primary issues are cost and investment choice.

So he should be contributing into his employers pension enough to get all the matching contributions he can.

Then it's a comparison of charges between the two schemes, and transferring the older pot into the newer pension if that scheme allows it.

Assuming he isn't investing in anything too exotic then the investment choices may well be fairly similar.

If his old pension has high charges then he could transfer into a new personal pension or sipp, a reasonable target for charges is probably around 0.5%, much more than this and it may be worth transferring.

fcandmp

Worth checking the range of benefits associated with the old scheme before assuming that they are the same. For example what allowance is there for a spouses pension?

lisyloo

Does your employers scheme have any advisors attached to it?
Normally I would ask them to advise if you should transfer it.

bigadaj

fcandmp wrote: »

Worth checking the range of benefits associated with the old scheme before assuming that they are the same. For example what allowance is there for a spouses pension?

Unlikely for a modern dc scheme.

bigadaj

lisyloo wrote: »

Does your employers scheme have any advisors attached to it?
Normally I would ask them to advise if you should transfer it.

A possibility but they may or may not be interested, minimum fees for many advisers would make this uneconomic for a £15k pot.

If they are it could be for the reason that they will gain fees by doing so rather than being the best option.