Pensions all over the place

KeepOnKnitting

Hi everyone,

I am unsure what to do, so thought I would ask advice. I used to work in a decent career with good pension options, but left that about 8 years ago, and haven't really had any decent pension options for a while, but am now in the NHS 2015 pension scheme on my zero hours contract. In October I finish my training and will be earning £24k and contributing 7.1% to the pension scheme, which the NHS put into as well and then they do complicated maths to determine what it means when I retire.

I have 4 small pension pots totalling around £50k in Aegon and Prudential and the People's Pension, which I should probably consolidate. I am saving for a house deposit for a modest house purchase once I graduate. I am 34. My state pension age is currently 68 (I think). I have had a period of a few years of being contracted out, but otherwise have always paid my NI stamp.

Am I in a bad way pension-wise? I have no idea if I need to look at making aggressive contributions to a SIPP, or if it is all going to pan out OK-ish. Would love some input from more knowledgeable people.

Thanks.

LHW99

Is your previous pension DB (final salary) or DC? Do you know what the current value (as a "pot" or an estimated pension)?

xylophone

It would seem likely that the OP's four old pots were DC?

It might be possible to transfer them in to the NHS DB Scheme but the OP needs to be aware that a transfer out would not then be permitted to a DC Scheme.

https://www.nhsbsa.nhs.uk/employer-hub/technical-guidance/transferring

It might be worth considering transferring the DC pots into one DC scheme for ease of administration and to maintain flexibility?

KeepOnKnitting

xylophone wrote: »

It would seem likely that the OP's four old pots were DC?

It might be possible to transfer them in to the NHS DB Scheme but the OP needs to be aware that a transfer out would not then be permitted to a DC Scheme.

https://www.nhsbsa.nhs.uk/employer-hub/technical-guidance/transferring

It might be worth considering transferring the DC pots into one DC scheme for ease of administration and to maintain flexibility?

Pretty sure they were DC. It was always a percentage of earnings.

What is a fair percentage service charge for a pension? I know they have to tell you what the charge is, but I don't know what a good rate is.

greatkingrat

If you are planning on staying in the NHS long term, then with 20+ years of NHS pension, plus the DC pots you have already built up you should end up with a good total so there is no need to panic at this stage.

xylophone

You could ask the current providers what they charge and check on whether a consolidation into one would be possible.

If you wanted to transfer into a SIPP, there is a comparison table here

https://monevator.com/compare-uk-cheapest-online-brokers/

but there are many variables depending on your personal situation.

If you wished, you could consult a local IFA - you would then need to consider whether the fee that would be charged would be worth it.

jonnygee2

Am I in a bad way pension-wise? I have no idea if I need to look at making aggressive contributions to a SIPP, or if it is all going to pan out OK-ish.

If you mean 'do I have enough', 50k at aged 34 is between reasonable and quite good.

Albermarle

What is a fair percentage service charge for a pension? I know they have to tell you what the charge is, but I don't know what a good rate is.

There are two elements to pension charges. The service cost of the pension provider ( Aegon for example ) and the charges for the investment funds(s) your money is actually invested in . So you need to add the two together to get the full picture . Confusingly sometimes there is just one charge that covers both elements but this is becoming less common nowadays.
Typically for the kind of workplace DC schemes mentioned here ( most likely invested in the default fund ) An annual charge between 0.6% and 1% would be normal, although higher could be possible especially if it was from a few years ago.

It might be worth considering transferring the DC pots into one DC scheme for ease of administration

and to maintain flexibility?

Also if the combined pot is over £50K then some pensions get cheaper.

KeepOnKnitting

Thanks for the help everyone, you have answered all my questions, even where I hadn't voiced them clearly.

I am really glad to hear that I don't need to be stopping the house savings to start paying into a pension in panic mode. I do plan to stay in the NHS for a while, unless I switch my career again. It is good to know that those early contributions have tided me over in the in-between period of insecure work. I do have pipe dreams of retiring before 68, but I can address that once I am in a nice little mortgage I think. Might look at combining the DC pensions sooner rather than later if there is a discount for the size of the pot.

Cheers everyone.