Standalone Pension?

madadam

I am 45, and have been paying into a pension for 22 years.
having had my latest statement, I would have been better putting it under the mattress as the projections are showing figures projecting a yearly pension worth 1.5x what I`m paying in each year at present.
I have confirmed that I can stop paying and become "paid up" with no penalty, as the £62/month would do better in my bank (or in my Mortgage in the long run).
Or, my question, could I transfer this private one to another pension that may have a better return, but one that I do not have to pay into each month - is this a viable option?
This pension fund worth 18k after 20 years. - my employers pension which is only 10 years old is already worth 12k - not sure about having all my eggs in one basket.
Or Ill just have to wait for 10 years and start to drawdown and then re-invest
Any advice?
Thanks

Lokolo

You can usually move pensions but it depends what type. Are these both defined contributions? You can request a transfer value from your provider.

dunstonh

having had my latest statement, I would have been better putting it under the mattress as the projections are showing figures projecting a yearly pension worth 1.5x what I`m paying in each year at present.

It is more likely that you are reading the projections wrong.

For example, the projections use rates set by the regulator and do not necessarily reflect the actual returns. e.g. the fund may be returning an average of 6% a year but the projection shows 2.4% per year.

In addition to that, the projections will be in todays terms and not future money terms. i.e. they deduct 2.5% a year for inflation. Just as you would do if you put your money under a mattress.

The projection assumes an indexed annuity will be purchased and the rates they use for that are below current market rates. Most people dont buy an annuity now. Let alone an indexed one.

I have confirmed that I can stop paying and become "paid up" with no penalty, as the £62/month would do better in my bank (or in my Mortgage in the long run).

No it wouldnt.

Or, my question, could I transfer this private one to another pension that may have a better return, but one that I do not have to pay into each month - is this a viable option?

At this stage, the issue is not the pension. It is your knowledge and understanding. That is the thing that needs to be addressed first. You need to understand what you are reading and what you are doing. Otherwise you are going to be in the same boat in 12 months time when the first statement from the new provider comes in using the same projection methods.

This pension fund worth 18k after 20 years. - my employers pension which is only 10 years old is already worth 12k - not sure about having all my eggs in one basket.

The biggest bit to any pension is what you pay into it. If you pay in peanuts, you get back peanuts. Spreading pension providers is usually pointless as personal pensions have 100% FSCS Protection.

Or Ill just have to wait for 10 years and start to drawdown and then re-invest

Why would you do that? Again, this comes back to knowledge and understanding. What you are suggesting there is likely to be the wrong thing to do.

Not having knowledge in an area is not a bad thing. However, making bad decisions on the back of bad knowledge and incorrect understanding is a bad thing. Before you do anything, you need to understand it more.

madadam

Can one buy a pension from a transfer of one pension that has regular deposits to one that just "sits there " until I reach age?
Im 45 and have a 22yr old pension that I presently pay £62/m into but its currently worth 18k (not very good really)
I could be better off with the £62 in the bank or into the mortgage each month.
My work pension is 10 years old and worth 12k (better returns)
but I`m not sure about putting all my eggs into one basket?


I have already confirmed that I could stop paying (become "paid up") with no penalty and then resume if my circumstances change in future. Or I could wait till 55 and then start drawdown and invest.
Any advice welcomed.
Thanks.

dunstonh

Answered your duplicate post.
https://forums.moneysavingexpert.com/discussion/5584487

Browntoa

Merged your duplicate threads

madadam

Thanks for the advice

dunstonh wrote: »

Not having knowledge in an area is not a bad thing. However, making bad decisions on the back of bad knowledge and incorrect understanding is a bad thing. Before you do anything, you need to understand it more.

Maybe a trip to an IFA required, with the info from both providers.


No rash decisions to be made yet then?

mgdavid

Correct, no rash decisions.
That might include seeing (and paying) an IFA when you would be better off doing some reading, asking more questions, and gaining the understanding yourself.
It can be a bit of a steep learning curve at first, some jargon to be learnt etc, but the basics are pretty straightforward.