What to do with 4 'frozen' pensions.

robowen

I've got 4 pension schemes ATM.

I started my first private scheme when my comapny told me they weren't doing pensions. 5 years later, they started up a scheme.

I stopped paying into my private scheme and contributed into the 1st works one.

I left there and the next company put me in their scheme, so I stopped paying into the 1st works scheme.

I left there, and now have another scheme to pay into...........etc etc

so, I got four schemes with funds in.
I want to combine all four funds into one scheme, but my current boss won't set up a D/Debit to pay the company contribution into a new scheme which means I could amalgamate all of them into one..
They are insisting that it's take it or leave it.

I don't know why legislation isn't introduced, to enable each person to carry one pension scheme around for life.

rob

Midas

Is having a few separate schemes such a bad idea? At least your risk is spread so if one fund goes bust, you've still got 3 left!

EdInvestor

Hi robowen

What you could do is open a low cost online SIPP and move all the old pensions except your current one into the SIPP, investing the lump sum.

Then if (when) you move on to the next job, you can move your current works pension into the Sipp to join the others.

Eventually I am sure there will be many people with SIPPs and companies will be quite happy to pay their contribution into them.

The advantage with the SIPPs are that charges are much lower and you get a much bigger selection of good funds, plus you can also invest directly in shares.

I don't know why legislation isn't introduced, to enable each person to carry one pension scheme around for life.

Effectively that's what a SIPP is.


A couple of cautions if planning to move old pensions:

1.Final salary pensions are often best left where they are, as long as the company is in good shape.

2.Watch out for any valuable guarantees ( such as guaranteed annuity rates GARS) on old personal pensions, which would be lost if the money was moved.

robowen

Midas wrote:

Is having a few separate schemes such a bad idea? At least your risk is spread so if one fund goes bust, you've still got 3 left!

I suppose it's not such a bad idea when you put it like that.

However, I'm getting bogged down with the mountain of paperwork with these pensions..... I don't know which bits to keep and which to bin.

I would prefer all eggs in one basket with this one as it will be easier to process at retirement...plus, it's easier for the wife to deal with should I snuff it first !! :rolleyes:

rob

dunstonh

I don't know why legislation isn't introduced, to enable each person to carry one pension scheme around for life.

They can if they want to.

You have some schemes that may be worth transferring but you have at least one that probably isnt. Until proper research is done on these schemes, anything typed on this thread isnt much use to you.

Although some areas of financial services can be done yourself, I am a firm believer that pension transfers are something you should get advice on. There are lots of things you will not be aware of with a pension and doing it yourself could mean you lose benefits which cannot be matched on a newer pension.

Because of the nature of the transaction, an IFA who specialises in pension transfers should be sought.

robowen

dunstonh wrote:

Because of the nature of the transaction, an IFA who specialises in pension transfers should be sought.

Thats right.. I do have someone who will deal with the paperwork when the time comes.

My comment about legislation was more to do with forcing an employer to make contributions to the pension chosen by the employee.

I don't see why it's so difficult to set up a D/Debit to my chosen pension rather than force me to accept a scheme I don't want.
I would be a fool not to accept it, as the company pay into it. But if they are paying into one scheme...why not pay into the scheme I want. You could understand their reluctance if they had 1000's of workers....but we have only got about 15 !.

rob

EdInvestor

Is this a Group Personal Pension (GPP)? If so they may have signed a deal with the IFA to pay all the contributions into the same scheme.The IFAs usually claim it will be cheaper with less hassle for them to do this - and may indeed have negotiated a sopecial deal with the insurer: so it might be good value.

As yet there are probably not very many non management individuals with developed private pensions who want this service, but I'm sure the emergence of SIPPs will cause demand to grow.

kerri607

Hi Robowen, I was in a very similar boat and was getting all stressed about it. I too wanted all my bits of pensions putting in one basket. I know some countries do have a pension that you can carry round with you from company to company and the employee has to pay into it. This would be so much easier. I went to see an IFA about my 3 pensions, it turns out that it is so complicated that i could never have tackled it alone. He wrote to the different companies to find out what i had 'in the pot' and it turns out not very much! but, i too would suggest getting someone in the know to look at everything as its too complex to get sorted on here and there are lots of variables. My problem is now.. my IFA is not gonna be able to sell me any product to get a fee through comission, so i am gonna have to pay him directly, anyone any idea how much i am likely to get billed? for three x one hour meetings and two or three letters? and of course his time for doing the analysis?

dunstonh

The funds must be under £3000 in total then for it not to be worthwhile for him to do them on commission. However, some IFAs do have higher minimums as it is not worth them doing it (i.e. their employer or company they are attached to take 50% of the commission). A sole trader IFA could cover their costs and just about make a profit with £3000 fund value.

On fee basis, anything from £150 to £500 if you proceed. You shouldnt need to pay for the first appointment.

EdInvestor

It's not necessarily hopelessly complicated, it depends on what kind of pensions you have. The trouble is for small sums like this, it's hardly worthwhile to pay a fee for an IFA, and if it's commission based, you could be sold a pup (again!).

IMHO anyone coming up to retirement with a fund of any size should get advice from a properly qualified pension IFAor - perhaps better - one of the firms like the Annuity Bureau which specialise in shopping around for best value annuities/drawdowns and won't make any serious mistakes like losing valuable guarantees (which non specialist IFAs have been known to do).

But for young people with bits and pieces of small funds?

Might as well DIY with a bit of help from sites likes these - you might actually learn something about pensions in the process. That would be an advance, wouldn't it? .

dunstonh

and if it's commission based, you could be sold a pup (again!).

RU64 prevents that.