Pension advice.

carlsagen

Hello, 

Im 40 years old and only have modest retirement provisions. My plan was always invest in my house instead. I have 4 policies from an old firm I worked for up until 24 years of age. The policies are split into 2 main polices each with a personal and group policy within them. Benefits include Return of all funds on death to a beneficiary or estate on death.

In my statements they have offered me the option to change where the products are invested, currently UK all Company tracker at a cost of 1.5% per year to .54% on a different product. Not sure what. 

Ive been looking at a SIPP and also PensionBee. I understand that I would loose this 'benefit' of all funds being returned on death if I moved to a SIPP or PensionBee.

Id like to start paying in again at some point. but not sure what would be best for me to do. There are currently no exit fees on my current products. 

SonOf

Benefits include Return of all funds on death to a beneficiary or estate on death.
Are you sure that it is to estate?  Pensions are normally outside of the estate (some rare exceptions apply).

Ive been looking at a SIPP and also PensionBee. I understand that I would loose this 'benefit' of all funds being returned on death if I moved to a SIPP or PensionBee.
No you wouldn't.   Money purchase schemes (with a few exceptions) return the value on your death.

carlsagen

SonOf said:

Are you sure that it is to estate?  Pensions are normally outside of the estate (some rare exceptions apply).
Thats what the bloke on phone said. Nominated person on estate if no one nominated. 

gm0

Even if your old schemes are open to contribution (fairly unlikely for old employer ones but I guess not impossible); you should consider carefully placing any new savings in a low cost vehicle i.e. a modern fund and an appropriate pension saving platform for you.  (Based on what you want to invest in, how often to invest, to trade, amounts to be held).  Or at least do the compare.

Example - I paid 0.04% fund fee for FTSE All Share UK passive index tracking fund in an employer scheme for a long time while accumulating and received the FTSE UK Allshare Total Return less this % drag which I checked with public index data.  I can no longer contribute to it having moved on.  But a SIPP can be had for as low as ~0.2% and the very cheapest passive funds are ~0.05% so sub 0.5% is obtainable DIY with some reputable choices.

So what you have for the old scheme + fund and platform fees looks "old and rather expensive" as a long term drag on your fund and its returns.   Sorry I can't be any help with the treatment of death benefits new vs old. Not an expert just a consumer and not focused on death benefits as mine aren't complex.

On this forum you will find a tracking spreadsheet of SIPP platform costs vs pension fund sizes and trading frequency.  And a quick google will find other comparisons (monevator, langcat, and some other sites with a financial interest).  
There are modern and digital startup fintech players in this space - Nutmeg, ScalableCapital and many more but charges vs the "boring" SIPP providers are often a bit high and the level of marketing "woo" is also quite high vs the actualite in terms of added value - actual big data science or institutional investment edge to your outcomes. 

I am avoiding these but as a way to get "app" friendly youngsters to start saving then I guess they have their place. 
I haven't explored pensionbee in detail so can't comment on them

This rabbit hole is quite deep and full of jargon - platform features, costs, differences.  LangCat up in Scotland have made a consulting business out of studying it and have some interesting downloadable web resources (albeit full of jargon) in return for an email address.

cloud_dog

carlsagen said:

SonOf said:

Are you sure that it is to estate?  Pensions are normally outside of the estate (some rare exceptions apply).
Thats what the bloke on phone said. Nominated person on estate if no one nominated. 

To me, this makes it sound like you may have a defined benefit policy/scheme?

carlsagen

I dont know much really. Its all, as you say full of jargon an gotchas. I just kinda wanted to do something with that pot. Make a work a bit harder and maybe stick some money in now and then... Though my thoughts are id be better off clearing my mortgage in terms of returns over any pension. 

Albermarle

Though my thoughts are id be better off clearing my mortgage in terms of returns over any pension. 

There are a lot of debates on this question . Of course it depends on a few personal issues , such as do you have a good (low) mortgage rate . Are you earning and can claim tax relief on pension contributions etc 

In general though  the rational financial case is to not overpay the mortgage, and to add money to the pension'

However many people see paying off the mortgage as a more emotionally based life goal and tend to not  think too much about separate pension provision. 

carlsagen

My mortgage is is about 1.5% Im classed as self employed though have my own company. I earn on the most tax efficient way. low wage topped up by dividend. Your right on the mortgage. I think id 'downsize' put that equity into a pension. 

SonOf

 Im classed as self employed though have my own company.  I earn on the most tax efficient way. low wage topped up by dividend. 
That means you are not self employed.   
So, pension is a very effective option with company contributions being made.