Pension Transfer Advice

joshparker1911

I recently started a new job and have since had my letter asking what I would like to do with my pension from my previous job . The issue I have is that my new company offers enrolment to Arriva passenger services national pension scheme which from what I understand is a type of final salary pension. I think this seems like a sensible option to enrol in when eligible, but what happens if I transfer my pension over now does it just disappear? From what iv managed to find online "Once you have joined the Scheme you may, 

if the Trustee agrees, bring a transfer value

into the Scheme from a previous pension 

scheme or arrangement.

Any transfer value accepted and received will 

be used to provide you with additional benefits 

under the Scheme, on such basis as the Trustee

decides. The amount received will be invested 

by the Trustee to provide benefits on a money 

purchase basis. That means the transfer value 

will be used to buy units in an investment fund, 

and the value of those units when you take 

your main benefits will be used to work out 

the additional benefit payable in respect of 

the transfer value"
Without sounding stupid this really doesn't mean alot to me, not going to pretend I'm great with pensions etc. Any info or advice would be great 

xylophone

https://www.arrivapensions.com/general-pensions/scheme-details/arriva-passenger-services-national-pension-scheme
 You took the information about the transfer in from the scheme booklet linked in the above.
The cash transfer value from the old scheme is  used to buy units in a fund. The fund itself will hold assets  such as shares and bonds. The hope and expectation is that the value of the units will increase over future years.
When you choose to bring your DB pension into payment, your units in the fund will be valued - the cash value will be used to buy benefits in the main fund - the benefits might be an increased lump sum or higher monthly pension or increased widow's pension etc.
What kind of pension is your old pension? What options are offered in respect of this pension?

joshparker1911

Thanks for the info. My previous pension was an aviva pension called  my future growth. Not a massive transfer value as I was only there a couple of years. The options available to me on the letter were to continue making contributions, leave the pension invested but stop paying or transfer to another pension scheme. Again thanks for any advise anyone can give me. I can get the transfer value if needed

Albermarle

If the old pension is not very big , say less than £10K , then it is not going to make a big difference what you do with it either way 
If you left it where it was you could maybe add to it in later years as contributing to pensions is usually quite tax efficient .
If it was a much larger amount then it would be a more difficult decision and you would have to delve into the detail more. 

joshparker1911

Albermarle said:

If the old pension is not very big , say less than £10K , then it is not going to make a big difference what you do with it either way 
If you left it where it was you could maybe add to it in later years as contributing to pensions is usually quite tax efficient .
If it was a much larger amount then it would be a more difficult decision and you would have to delve into the detail more. 

Think the transfer value was around the 15k mark 

xylophone

The old pension is a DC pension and available to you from (at the moment), age 55.
It may suit you to leave the fund with Aviva so as to have flexibility in the future?

joshparker1911

xylophone said:

The old pension is a DC pension and available to you from (at the moment), age 55.
It may suit you to leave the fund with Aviva so as to have flexibility in the future?

Thanks for that, I think that could be a good idea, am I right in thinking I could use this pension later down the line to avoid paying a higher tax rate by contributing to this pension? 

Albermarle

joshparker1911 said:

xylophone said:

The old pension is a DC pension and available to you from (at the moment), age 55.
It may suit you to leave the fund with Aviva so as to have flexibility in the future?

Thanks for that, I think that could be a good idea, am I right in thinking I could use this pension later down the line to avoid paying a higher tax rate by contributing to this pension? 

You already said that the pension allows for further contributions , so should be no problem to add more to it .
Whether and how much  you can reduce your 40% tax will depend on your salary at that time, and how much  you and your employer are  already contributing to your current workplace pension.