To move, or not to move...multiple pots

cfw1994

Hi there,
I appreciate I should get an IFA involved, but would welcome any initial thoughts here (& things to ask an IFA?!)
I have 6 pension pots through various moves (& work adjustments):

• Aviva: Main 'active' work one with decent sum in, I proactively check this quarterly and have shuffled the fund choices about a little, pretty happy with what is going on there

• Local Government - only transfer value 3K, assume this is best left alone (small but on DB!)

• 4x other DC pots, transfer values approx 125k (PIC), 27k (Fidelity), 26k (Quilter), 15k (Clerical Medical)

I know from monitoring those last 4 on an annual basis that not a lot changes, and feel they might be better off adding to my main Aviva one: I don't believe they offer any specially good safeguarding benefits or guarantees, plus I can easily see what goes on in the main one, I know the funds are doing well (obviously helped by me actively paying in!)

That said, I am only 18 months off being 55, so maybe I am better having some sub-30k pots that I could potentially dive into with little to no assistance come that point!

Any thoughts/considerations ?

On the topic of an IFA - most talk about managing the pot (& taking their % for doing so) - for now I am pretty comfortable doing that on the 'main pot' myself. I have heard some less than stella stories from friends, & know one colleague who shifted his work pot to a "well regarded" company, & frankly the post-move things didn't sound overly impressive to me (don't wish to cover in a forum!), compared with what I continue to see in the Aviva funds!

When I hit 55 and perhaps want to take a chunk (up to 25%) & if I am happy to move to drawdown, do I HAVE to take financial advice?
Or can Aviva simply move it to a drawdown account that I can continue to manage?

(IFA recommendations in the Midlands/Leicester area welcomed!)

Appreciate your views!

AnotherJoe

No you dont have to take financial advice.
Check the management fees and choices you have.
Steer well clear of St James Place

Give my regards to Stella

cfw1994

AnotherJoe wrote: »

No you dont have to take financial advice.
Check the management fees and choices you have.
Steer well clear of St James Place

Give my regards to Stella

Not sure who Stella is?.....but yes, I had heard bad tales of SJP!

So: come 55, I could instruct Aviva to release 25% and move the remainder to a drawdown account myself?
For some reason, I thought if it was over 30K then one HAD to take advice?

Also: any thoughts on consolidating the other smaller ones into it?

(& FWIW, I do plan to take some advice, but want to know the depth I *must* go into versus that I might want to!!)
thanks!

AnotherJoe

cfw1994 wrote: »

Not sure who Stella is?

cfw1994 wrote: »

I have heard some less than stella stories from friends

cfw1994 wrote: »

So: come 55, I could instruct Aviva to release 25% and move the remainder to a drawdown account myself?

Yep.

cfw1994 wrote: »

For some reason, I thought if it was over 30K then one HAD to take advice?

You have to take advice if converting from a DB pension to a DC and the value (CETV) of the DB is more than £30k.

cfw1994

Ahhhh: THAT Stella ! I’m blaming autocorrect!
Thanks for the help

cfw1994

BTW, (& maybe you have a view, AnotherJoe - you are clearly above-average on your knowledge in this area!)

Any thoughts on the moving of those other pots into the one Aviva pot?

Obviously not expecting 'advice', but thoughts on reasons to NOT move them, questions to consider, would all be appreciated!
thx

point5clue

I"m not an expert, but I had quite a few DC pension pots and for a very long time left them be, mainly due to lack of confidence to take action.

Having now moved/consolidated a number of pension pots I would say that it not very hard to do, though it can take many weeks of waiting for a transfer to complete.

The most important thing is to understand what the charges are for each scheme, and any protected benefits. I bet you will find that at least one of your pots has much higher charges relative to the others.

I found a pot that was fairly small, had high charges, and no protected benefits and it spurred me on to move it. This gave me the confidence to move another one. The rest turned out to be 'good enough' for now.

The other really important thing is to understand the investment choices within the pots. If you are like me you will have picked the funds many years ago, and they may not be what you would pick now.

In all the pots I kept I changed funds to a global index tracker and UK gilt fund.

I know a number of colleagues who have consolidated all their pots to the current company scheme even though the charges are higher than the previous one, and the investment choices poorer. A high price to pay for 'keeping it simple' in my opinion.

xylophone

You might consider consolidating

4x other DC pots, transfer values approx 125k (PIC), 27k (Fidelity), 26k (Quilter), 15k (Clerical Medical)

into a SIPP/other personal pension offering flexible drawdown to allow you more flexibility at age 55?

https://moneytothemasses.com/saving-for-your-future/pensions/the-best-cheapest-sipps-low-cost-diy-pensions

kidmugsy

Judging by this link, there's a case for splitting up the Fidelity or Quilter pot into three. Could that flexibility be of any use to you, or would it be a needless complication?

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/small-pots-defined-benefit-trivial-commutations/

Tammer

One thing to watch for is the compensation amounts available if the provider was to become insolvent. This is hopefully unlikely but we are in quite uncertain times and best to think through the various risks.

The amount of compensation varies depending on whether it's an "insured product" or a deposit or investment fund, among other things.

cfw1994

Thanks for those last replies!

With Aviva, there is (at least whilst I am a paying in member!) no platform charges over & above the fund charges, and those are pretty low: the base 10 I can chose from are 0.25 or 0.31%, which I believe is very low....I don't think I would find an alternative SIPP offering better low costs, unless anyone here would suggest anything?

I do like the low-cost Vanguard funds (generally!), but they are not an option within Aviva....but there are plenty of others.

Hence I feel that consolidating them could make sense for me.

Splitting down to enable sub-£10 withdrawals would not be massively beneficial to me: reaching 55 and having the option for up to 25% on a bigger pot would be more appealing!

Still finding out more about the drawdown options within Aviva, but I was told the scheme we are on does offer it.

There is always a background concern of "all eggs in one basket", but Aviva ought to be a pretty well protected basket, right?!
thx!