A man with six pensions who needs sorting out…

Elijah_Bailey

I am an employed man of 46 and my better half has made me aware that my state pension is now only 20 short years and 3 weeks away. And so, here I am………

I have been employed by numerous companies over the last 25 year and I have accumulated various DC pensions, which I have listed below.

I am considering contacting an IFA shortly but as a new reader of this forum I am concerned I will be paying a decent sum of money (four figures) for admittedly good advice on my small sums of money. I do not want to spend a substantial sum for some guy or girl to tell me the obvious if it is plain for all to see.

I thought I should lay myself bare before you all and ask for comments or opinions before I bite the IFA bullet. I have obtained some information from my pension fund holders but the older / closed companies are understandably very slow to respond.

The obvious issue is that I have too many schemes and that some should be transferred into others but the older ones I am sure will have large penalties and huge exit fees for transfers so maybe they should be retained.

Any help or comments would be very welcome.

Employment Pension Plans

Pearl Prosperity Personal Pension Plan with Profit
Company Status = Closed to new business (Phoenix Life)
Years Active = 1995 to 2000
Current Value = £7182.17
Transfer Value = £6445.67 (£736.50 transfer charge = 10.5% penalty fee)
Costs and Charges = No response received from Phoenix Life (so far)
Current Status = No contributions being made / I was told by PL I cannot add new contributions
Possible Extra Benefits = Bonus paid on maturity at age 65

Pearl Personal Pension Account – Unitised With Profit
Company Status = Closed to new business (Phoenix Life)
Years Active = 2000 to present
Current Fund Value = GMP of £19926.15 (plus additional bonus £9556.12)
Transfer Value = £29482.27 (transfer penalty fee not known yet)
Costs and Charges = No response received from Phoenix Life (so far)
Current Status = £106 contribution per month still being made (£85 from me and £26 from HMRC)
Possible Extra Benefits = Death benefits and bonus paid on maturity at age 65

Abbey Life Personal Pension Plan
Company Status = Closed to new business
Years Active = 1992 to 2012
Current Fund Value = £39217.12
Transfer Value = £39192.12 (reduction of 0.05% for admin fee - penalty fee not known yet)
Costs and Charges = 0.75% AMC
Current Status = No contributions being made
Possible Extra Benefits = Unknown at this time (probably none) I am still reading the small print

Friends Life Personal Pension Plan (plan originally was AXA / Sun Life)
Company Status = Active
Years Active = 1998 to present
Current Fund Value = £10620.09
Transfer Value = £10242.92 (reduction of 3.55% on full value)
Costs and Charges = 1% AMC
Current Status = £125 contribution per month being made (£100 from me and £25 from HMRC)
Possible Extra Benefits = None I am aware of but retirement date is set at 2029, not 2036

Standard Life Personal Pension Plan
Company Status = Active
Years Active = 2014 to present
Current Fund Value = £6211.64
Transfer Value = £6211.64
Costs and Charges = 1.14%
Current Status = £375 contribution per month being made (£300 from me and £75 from HMRC)
Possible Extra Benefits = None I am aware of

Nest Personal Pension Plan (with current employment)
Company Status = Active
Years Active = 2015 to present
Current Fund Value = £7469.80
Transfer Value = not currently available at this time
Costs and Charges = 1.8% contribution charge / 0.3% AMC
Current Status = £260.36 contribution per month being made (£104.14 from me / £130.18 from employer (salary sacrifice) and £26.04 from HMRC)
Possible Extra Benefits = None I am aware of
Comments = Charges are nasty but it does include employer contributions.

I am continuing all the above contributions at the moment as I can currently afford it. I have over a year’s salary in cash savings and some more money tied up in cash ISA’s plus some extra in a S/S ISA.

With regard to the state pension, according to my statement from my GOV.UK research, I am currently eight years short of NI contributions due to contracting out into the Abbey Life Pension up to 2012. As I have 20 working years left this should allow plenty of time to achieve the full state pension (in whatever form it exists in 2036).

That’s it so far. I look forward to any responses.

Many thanks.

maximumgardener

OK ....rough & dirty your 6 pensions total approx £100k.

6 separate pensions is pretty unwieldy as you already have said ...so it will pay you now to get these consolidated & re-invested (where it makes sense to do so...ie not losing valuable benefits) & a decent IFA is what you need for the leg work here. IMO its worth paying for that now as you have 2 decades of performance ahead!!!
lucky you!!

xylophone

http://www.thepfs.org/yourmoney/find-an-adviser/

You might find the above of use.

nearlyrich

I wouldn't bank on a state pension at 66 I am 54 almost 55 and mine is not until I am over 67. As others have said you have time on your side and if you get the money performing it will grow into a worthwhile amount. Good luck...

atush

I agree they will be 67 at SPA at least.


Yes, with that load you will need an IFA to help sort it all out.

It might be worth asking if those policies that are carrying a exit fee have internal transfers w/o a fee into something more modern.

kidmugsy

Here are my guesses. In your shoes I wouldn't depend on a stranger's guesses, but it is a points-for-discussion list.

Elijah_Bailey wrote: »

Pearl Prosperity Personal Pension Plan with Profit
Company Status = Closed to new business (Phoenix Life)
Years Active = 1995 to 2000
Current Value = £7182.17
Transfer Value = £6445.67 (£736.50 transfer charge = 10.5% penalty fee)
Costs and Charges = No response received from Phoenix Life (so far)
Current Status = No contributions being made / I was told by PL I cannot add new contributions
Possible Extra Benefits = Bonus paid on maturity at age 65

I'd be reluctant to pay a penalty of 10.5%: over a 20 year remaining life that's roughly equivalent to 0.5% p.a. extra costs. And you'd be sacrificing any hopes of a terminal bonus. Any chance they'd let you merge it into the one below without charge? I suppose not.

On the other hand, see next.

Elijah_Bailey wrote: »

Pearl Personal Pension Account – Unitised With Profit
Company Status = Closed to new business (Phoenix Life)
Years Active = 2000 to present
Current Fund Value = GMP of £19926.15 (plus additional bonus £9556.12)
Transfer Value = £29482.27 (transfer penalty fee not known yet)
Costs and Charges = No response received from Phoenix Life (so far)
Current Status = £106 contribution per month still being made (£85 from me and £26 from HMRC)
Possible Extra Benefits = Death benefits and bonus paid on maturity at age 65

One advantage of transferring out of a With Profits plan is that if there is currently no Market Value Reduction (sometimes euphemised as Market Value Adjustment) you might feel you'd like to press on with a transfer before a MVR/MVA is introduced. Otherwise, see above.

Elijah_Bailey wrote: »

Abbey Life Personal Pension Plan
Company Status = Closed to new business
Years Active = 1992 to 2012
Current Fund Value = £39217.12
Transfer Value = £39192.12 (reduction of 0.05% for admin fee - penalty fee not known yet)
Costs and Charges = 0.75% AMC
Current Status = No contributions being made
Possible Extra Benefits = Unknown at this time (probably none) I am still reading the small print

The admin fee is trifling: the AMC doesn't seem huge, unless there are also fees within the funds that you are investing in. If the latter is true, I'd be tempted to move to something like a SIPP where the fees are explicit, and you could (for instance) invest in passive tracker funds or ETFs with low charges. If you then scarcely trade, it could be a cheap way to invest.

Elijah_Bailey wrote: »

Friends Life Personal Pension Plan (plan originally was AXA / Sun Life)
Company Status = Active
Years Active = 1998 to present
Current Fund Value = £10620.09
Transfer Value = £10242.92 (reduction of 3.55% on full value)
Costs and Charges = 1% AMC
Current Status = £125 contribution per month being made (£100 from me and £25 from HMRC)
Possible Extra Benefits = None I am aware of but retirement date is set at 2029, not 2036

I don't like the reduction of 3.55% and I don't like the 1% annual charges. Unless there is a penalty for stopping contributions I would at the least consider stopping contributing to this and instead consider contributing to the SIPP mentioned above. I would also consider transferring to consolidate.

Elijah_Bailey wrote: »

Standard Life Personal Pension Plan
Company Status = Active
Years Active = 2014 to present
Current Fund Value = £6211.64
Transfer Value = £6211.64
Costs and Charges = 1.14%
Current Status = £375 contribution per month being made (£300 from me and £75 from HMRC)
Possible Extra Benefits = None I am aware of

I might like to consolidate this one into the SIPP.

Elijah_Bailey wrote: »

Nest Personal Pension Plan (with current employment)
Company Status = Active
Years Active = 2015 to present
Current Fund Value = £7469.80
Transfer Value = not currently available at this time
Costs and Charges = 1.8% contribution charge / 0.3% AMC
Current Status = £260.36 contribution per month being made (£104.14 from me / £130.18 from employer (salary sacrifice) and £26.04 from HMRC)
Possible Extra Benefits = None I am aware of
Comments = Charges are nasty but it does include employer contributions.

As you say, nasty charges but wonderful free money. I'd investigate whether I could contribute more, even if your employer would not contribute more too. As long as you are able to use salary sacrifice efficiently, there's effectively free money for you, because you will presumably be avoiding Employee NICs. (And even conceivably be collecting some of the Employer NICs too; it's worth checking the detail here). This is probably the most efficient pension to contribute to, until you've reduced your pay to minimum wage. Better than contributing to a SIPP, I'd say, but I can't claim to be well informed about Nest.

Elijah_Bailey

May thanks for the swift responses.

I am stuck with the current Nest pension due to the employer contribution but hopefully transfers will become possible in the future allowing some flexibility.

I am already leaning towards transferring the Friends Life, the Abbey Life and the Standard Life. As Friends Life is now part of Aviva, hopefully a more up to date product from them may allow me to avoid the 3.55% exit fee. If not, I will just have to bite the bullet.

The Pearl policies, being the oldest, will require more thought and planning as I do not wish to miss out on any bonuses or forfeit any GMP guarantees. This is where I need an IFA.

The SIPP idea is something I am reading about now so I can cover every angle going forward. Deep research is required.

Many thanks.

PensionTech

hopefully transfers will become possible in the future allowing some flexibility.

Yep - April 2017. However, a transfer (assuming that you're talking about transferring out of NEST) wouldn't necessarily help anything since the charges are loaded onto the contributions, not so much the ongoing fund management. So once your money's in the scheme, the damage is largely done. If your employer insists on using NEST then there's not much you can do about it.

You may also want to note that the charging structure of NEST may look nasty but 1.8% on contributions is not comparable to 1.8% on the fund value - it is cheaper as the same funds don't get hit over and over again each year. As an auto-enrolment scheme, NEST has to certify that its charges are, on average, equivalent to no more than 0.75% AMC. This is an average; whether it works out better or worse overall for an individual depends on the member and contribution profiles, but it would tend to favour younger savers.

ex-pat_scot

I was roughly the same age as you and consolidated 7 different pensions into one Alliance Trust SIPP.
I did it myself: I didn't see why I needed to pay an IFA to fill some forms out for the admin.
It's nice seeing your pot in one place.

zagfles

kidmugsy wrote: »

As you say, nasty charges but wonderful free money. I'd investigate whether I could contribute more, even if your employer would not contribute more too. As long as you are able to use salary sacrifice efficiently, there's effectively free money for you, because you will presumably be avoiding Employee NICs. (And even conceivably be collecting some of the Employer NICs too; it's worth checking the detail here). This is probably the most efficient pension to contribute to, until you've reduced your pay to minimum wage. Better than contributing to a SIPP, I'd say, but I can't claim to be well informed about Nest.

The Nest charges are only "nasty" for a few years - after that the low AMC will easily outweigh the contribution charge.

Elijah_Bailey

I believe a well researched SIPP will the way forward to consolidate the Abbey, Friends and Standard Life policies. I already have Vanguard LFS80 in a S/S ISA so I am already dipping my toe in the water regarding fund investing.

The Pearl Plans need further research to ensure I am not missing any bonuses. Phoenix Life are not in any hurry to respond so far.

The explanation about the low average AMC for the Nest Pension is welcome news also. Thanks.