Former group pension now private pension

jezzer_72

Hi all.

I’m not good with pensions but I’m trying to learn and understand a little more.

In any case, I had a group employee pension from my last employer. Upon leaving this was transferred to a private pension. For context, I have two pensions and have been working for 6 years but only paying into a pension for 4 years as my first employer didn’t have a pension. I did receive a lump sum upon leaving the company though. I have a new auto enrolment pension with my current employer with a different pension provider with very little value as I’ve been contributing since October 2018. I’m 32 if that helps.

The managers of the group pension have wrote to me to say that they have negotiated an opportunity to upgrade my now personal pension to a group pension plan giving me a lower charge - from 0.45% to 0.37%. To take advantage of the offer there will be a one off charge of 0.5%.

They have also offered an upgraded management service which appears to have a charge of 0.24% payable over 12 months.

My pot isn’t large by any means and on the surface the charges amount to pennies on the current value of my pension and over the long term the lower charge is obviously advantageous.

However, as I’m woefully uneducated about these things despite trying to learn since changing employer I’m not sure what i need to be looking at and what the considerations are that I should be taking. My instinct is that the upgraded service charge of 0.24% will wipe out any benefit from the reduction in fee which is 0.08%.

Any advice or pointing me in the right direction will be useful.

Many thanks.

Albermarle

The offer from the group pension of your ex employer looks a rather unusual one to me , especially the 0.5% set up charge .No doubt somebody better informed will comment.

In the meantime I suggest you find out the charges for your new current pension and whether they accept transfers in ( they normally do ) . You should then consider the option of transferring your old pension to your new one .
Be aware that with pensions there are usually two charges . One for the pension company and one for the funds the money is actually invested in . However just to complicate things for some personal/workplace pensions there is just one charge to cover both.

jezzer_72

Thanks. I am considering transferring but I think, although I’ve not looked into it much more, that I get some benefits that are not applicable to my new pension and my new employer won’t pay into the existing one.

planteria

the latter point is not surprising.. most companies have a pension scheme set up and only look to pay into that for their employees.

the question for many of us is whether to transfer pot(s) from previous employers into our current employer's pension scheme.

Marcon

jezzer_72 wrote: »

In any case, I had a group employee pension from my last employer. Was this a scheme run by your employer purely for its own employees, with a board of trustees? Or was it (as is more likely) a 'group personal pension' arrangement, where each employee has their own individual contract with the pension provider and it is a 'group' arrangement purely in terms of employer admin?Upon leaving this was transferred to a private pension. If it was a group personal pension, you weren't transferred; you just took your existing personal pension contract with youFor context, I have two pensions and have been working for 6 years but only paying into a pension for 4 years as my first employer didn’t have a pension. I did receive a lump sum upon leaving the company though. Why? What was the lump sum for?I have a new auto enrolment pension with my current employer with a different pension provider with very little value as I’ve been contributing since October 2018. I’m 32 if that helps.

The managers of the group pension Who are the 'managers' - the insurance company with whom you have the contract?have wrote to me to say that they have negotiated Negotiated with whom..?an opportunity to upgrade my now personal pension to a group pension plan Who are you allegedly 'grouped' with?giving me a lower charge - from 0.45% to 0.37%. To take advantage of the offer there will be a one off charge of 0.5%.

They have also offered an upgraded management service which appears to have a charge of 0.24% payable over 12 months.What form does this upgraded service take?

This is quite a strange looking offer. I'd give TPAS a call and chat it through with them, rather than relying on posting bits of info here and getting asked a load of questions which are probably completely baffling! Free and impartial - just have your paperwork to hand when you call: https://www.pensionsadvisoryservice.org.uk

jezzer_72

Thanks. I gave them a call about transferring but they just told me to read information sheets on the website

To answer your questions:

It would appear to be a group personal pension.

I received the lump sum as they said it was going into a pension scheme when i started but it turned out it wasn’t. It was just being held in their bank account and some others in the company just received the small contribution as part of their salary per month. But a contribution was shown in our employment contract.

The managers are Johnson Fleming who managed the group pension on behalf of my former employeer and the pension company is Scottish Widows.

The leaflet says the upgraded service includes a lower management fee, access to a dedicated website, something called nudges which appear to be email messages giving you things to consider and help choose the right fund, telephone access to experts and webinars to help understand pensions better.