What happens to pension if you move jobs?

Zola.

I am not planning on moving jobs any time soon, as I enjoy where I work....but... our work's pension is with Scottish Widows, say if I left and went somewhere else, what happens to that pension?

Obviously my employer would stop paying into it, and presumably the management fee would go up (as the pension representative said we get a discounted company rate).

Would I then transfer that pension, or would you just leave it?

lisyloo

It depends............................

Reasons for leaving are
1) There are large penalties to move it (more likely with older pensions)
2) There are some valuable guarantees or benefits

Reasons for moving it are
1) potentially lower fees having fewer pensions or having it in an employers scheme with discounted rather than an individual one or an employers scheme with additional fees
2) you might get better fund management if you would find it hard to manage multiple pensions e,g,I regularly move my company SIPP (that has not advice) to my personal SIPP as the portfolio is managed by an advisor for me. But of course you may be different and be brilliant at keeping tabs on multiple portfolios.

sorry it's not straighforward

is it an old one or a new one. In general newer ones are more "portable".

AnotherJoe

You could do either or both. "It depends"

For example if the new pension doesn't allow transfers in, you'd either keep it where ut was or move it somewhere else such as to a SIPP. If it does allow transfers in, you still might not transfer it if you think the old scheme is better.

Zola.

Its a pension of about 9 years, im still in early 30s... just curious!

lisyloo

You need to find out what the penalties are. You can do this by asking for a transfer value.
You also need to find out whether there are any guarantees or benefits with the plan (one of my plans has an enhanced tax free ump sum under A-day rules).
You need to find out whether you new scheme accepts transfers in.
You need to find out the charges on your old scheme if you leave it there and the charges on you new scheme (or where youplan to transfer it to).

I have an advisor who'd do this for me under our current relationship but he gets fees from my SIPP.
You would probably have to pay for such a service and it may not be worthwhile.
If you new pension scheme advisors are amenable they might help you for free on the basis of
a) maitaining their good relationship with your employer and
b) wanting to get the business

so as a first step I'd ask them if they would help.
Unless you are a professional it can be hard to ask the right questions, for example I asked about guarnatees and was not told about benefits that were not guaranteed.
Reminds me of the time I asked BT about the charge for paying by cheque, they said none. There is a discount for Direct debit so there is a premium, but I didn't use the right words. If you don't use the correct terms you won't get an accurate answer.

Prism

It depends in general however the Scottish Widows pension is typically quite expensive unless your company has got a good discount, and the fund selection is limited. I would probably move it unless there was an high charge to do so.

ex-pat_scot

Prism wrote: »

It depends in general however the Scottish Widows pension is typically quite expensive unless your company has got a good discount, and the fund selection is limited. I would probably move it unless there was an high charge to do so.

My current employer GPPP with SW does similarly appear expensive, even if I get a decent rebate on the charges.
If/ when I leave, then my expectation is that my SIPP will probably prove cheaper and therefore I will transfer across. I will obviously compare costs and fund selection (of which the SW range is rather restricted)

dunstonh

Lloyds have starved Scottish Widows of funding and the SW product range nowadays is out-of-date and expensive compared to modern options. However, there are still a few odd gems in their old range. They were one of the last to end Guaranteed annuity rates for example. Lloyds have a history of buying insurers and running them into the ground.

kidmugsy

Zola. wrote: »

... presumably the management fee would go up

On one thread in the past year or so, somebody said that it's no longer legal to charge different fees to active and inactive members of occupational pensions. Can anyone confirm or refute?

Brynsam

kidmugsy wrote: »

On one thread in the past year or so, somebody said that it's no longer legal to charge different fees to active and inactive members of occupational pensions. Can anyone confirm or refute?

Correct. OP - read your scheme booklet/staff handbook to find out exactly what your options are in respect of this scheme.

Brynsam

[QUOTE=lisyloo;74215151
Reasons for leaving are
1) There are large penalties to move it (more likely with older pensions)
2) There are some valuable guarantees or benefits
[/QUOTE]

Large penalties are largely a thing of the past. The second point above is hugely valid, though, and well worth checking.