Transfer Workplace Pension (1 Year Contributions) / Managing New One

chaotic_j

Hi,

I was enrolled into a workplace pension with a previous employer. The operator is B&CE and product 'The People's Pension'. I was paying in for 12 months 1% of my salary and employer 0.8%, the total fund value is £643.22.

I am now at a new employer and have again been enrolled into another workplace pension this time the operator is Royal London and product 'RS Group PP Plan'. I have been paying in for 4 months 3% of my salary and employer 2% recently increasing to 4% and 3% respectively, the total fund value is £366.59.

I enquired with Royal London about transferring the B&CE product to them. They read out a disclaimer and I had no idea what they were talking about. Financial jargon I have never heard before. They sent an email with pages of information telling me to ask me to ask B&CE if any of my funds are crystallised, amongst other information.

Would there be any downside to transferring the B&CE product to Royal London in order to consolidate it? I also read online I could request a refund of contributions as I'd been in the scheme for less than 2 years etc. but presumably then I'd lose what the previous employer had paid in and the 0.2% tax relief.

Also, I noticed it is possible to change some settings with the Royal London product, at a high level you can choose what seems to be a low, medium (the default option) or high risk options. These could give lower, or higher returns.

It is even possible to go in and set more detailed investment options by funds etc. I'm assuming this is a bad idea unless you have experience in shares. Is it best to leave in the default option and let Royal London manage it?

Thanks in advance,
chaotic_j

chaotic_j

Hello,

Would really appreciate some advice if anyone is reading.. would there be any downside to transferring this prior 12 month workplace pension with a £643.22 total fund value?

Thanks in advance,
chaotic_j

Kynthia

I can't think of any downside for such a small amount of money and you won't have any benefits with The People's Pension that you shouldn't give up.

The refund for under two years of service I think only applies to defined benefit pensions and you have a defined contribution pension. Don't worry about the jargon as I think it's mostly for your own scheme to answer. However feel free to ask on here for any definitions of terms you don't understand as it's good to learn about these things.

Linton

The downside could be that the costs and choice of investments are better in the old pension than in the new. I have no idea whether that is the case.

However since it only a smaller amount of money any difference must be small compared with the hassle of managing a tiny pension. So it makes sense to me for you to transfer the old pension to your new employers scheme.

What the RL advisor would probably be saying is that this would be an unadvised transfer and so it would be your responsibility if it subsequently turned out to be a bad move, which for £843 is not a significant risk. Also they will want to know whether you have taken money from the pension, which you havent.

Re changing options - it may be a good idea to change the options but only once you understand what they mean, and the effect of changing them.