Is it worth combining small pensions into the Peoples pension?

recci

I'm in my early 40s and have never really planned for my retirement as just getting by month to month was hard enough.  But I have 3 different small pension pots from various jobs throughout the years. In my current position, I have been enrolled in the people's pension and I have about 3 years worth of contributions in it. I also have a small pension from a previous employer that has about £2500 in it. The job didn't last very long and the pension is with Royal London, its the Group Personal Pension Plan. I got a letter in after I was laid off saying the pension is Paid up since I left the company. I have noticed that the value of this has gone down recently and I was thinking would it be better to just transfer this into the Peoples pension? 
I also discovered that I have a Scottish widows stakeholder pension from around 2001. I hardly paid anything into this either before the job went down the pan but I discovered that somehow through government contributions I have over 7 grand in it. I noticed in the statement that this has lost money recently also. I don't really know what the difference is between a stakeholders pension and a normal one is and I haven't paid into it for over 18 years. Should I transfer this to the people's pension or leave it where it is?
Will I get hit with fees for these transfers?

dunstonh

I have noticed that the value of this has gone down recently and I was thinking would it be better to just transfer this into the Peoples pension? 

You will probably find the Peoples pension went down in the same period as the RL pension as well.  And that both have gone up since.

 noticed in the statement that this has lost money recently also. I don't really know what the difference is between a stakeholders pension and a normal one is and I haven't paid into it for over 18 years. 

There are about 15 different types of pension.  Stakeholders were introduced in 2001 with a charge capping in place in an attempt to lower charges.  They are a basic option where you cannot do too much wrong.  Will never be the best option but never the worst.    However, times have moved on and modern pensions are often cheaper and offer better investment options and stakeholder pensions are often niche nowadays (such as for children/grandchildren or arranged on a low cost basis).

Should I transfer this to the people's pension or leave it where it is?

Nobody can answer that without an analysis of the pensions.   However, as all three have low values, it is really just tinkering for convenience rather than getting any real benefit from it.

Chances are, putting all three into a different pension from a robo-adviser would be best (I cannot name one due to regulatory constraints but others posting who are not regulated can and will).

Will I get hit with fees for these transfers?

Possibly but probably not.  Certainly not on the stakeholder pension.

xylophone

Have you checked on your state pension forecast?
https://www.gov.uk/check-state-pension

Re stakeholder
https://www.which.co.uk/money/pensions-and-retirement/personal-pensions/stakeholder-pensions-a6uhh4u0wdtx

https://www.thisismoney.co.uk/money/pensions/article-4644230/Is-worth-combining-pensions-one.html

If I were in your position, I would be inclined to transfer the two very small pensions into the current scheme, unless I  thought that I might want to take them as "small pots".

https://www.which.co.uk/money/pensions-and-retirement/personal-pensions/stakeholder-pensions-a6uhh4u0wdtx

https://www.which.co.uk/money/pensions-and-retirement/personal-pensions/stakeholder-pensions-a6uhh4u0wdtx

There should be no charge to transfer out the stakeholder.

You can check with Royal London on the situation there.

https://thepeoplespension.co.uk/your-member-information/

https://thepeoplespension.co.uk/help/knowledgebase/can-i-transfer-my-other-pensions-to-the-peoples-pension/

recci

Thanks for the answer, I guess I am just wanting to get them all in one place to act as start going forward. Although the total amount doesn't really add up to much its better than a kick in the nuts and I technically still have 28 years to pay into one. 

Albermarle

If you do decide to transfer then , you ask the Peoples Pension to organise it . Normally there would be no need for you to inform Scottish Widows or Royal London of your intentions.
https://thepeoplespension.co.uk/pension-transfer/

If not done so already you should look at the People Pension website , where there is clear info on how it all works. You should consider which investment fund within the pension is best for you . With 28 years to go normally the 'Adventurous fund ' would be better. Also it goes without saying if you can add any extra contributions your future retired self will thank you for that .

You should be aware that all pension funds are invested in the financial markets and they had a rough ride in the first half of this year due to Covid, and this affected all pension funds, although most have largely recovered. 

Joey_Soap

I see little to no downside to combining all three pots of money in one place. That way you aren't going to lose track if them in the next 20 years.

Albermarle

Joey_Soap said:

I see little to no downside to combining all three pots of money in one place. That way you aren't going to lose track if them in the next 20 years.

Usually when you say something like that , someone comes along and mentions that you might benefit later on from being able to utilise the small pot rule when taking the pensions. However this is getting a bit technical for most people and this small pots rule might change at some point anyway . So I agree that the practical answer is to combine them .

recci

Thanks, guys, probably just combine them then. Is there a lot more risk with the 'Adventurous fund '? I plan to make more contributions myself especially once my student loan is paid off. I may just divert the same amount I'm paying into the pension. 

Albermarle

recci said:

Thanks, guys, probably just combine them then. Is there a lot more risk with the 'Adventurous fund '? I plan to make more contributions myself especially once my student loan is paid off. I may just divert the same amount I'm paying into the pension. 

When you are talking about mainstream investments like in this pension fund , 'risk' does not mean the risk of losing everything .
What it means is that there is a risk that it will maybe drop in value at some point, maybe by 30% for example. However history shows that in the long term it will go up . So risk really means volatility . So the higher risk funds will go up and down a lot in the short or medium term but is expected to go up more in the long term than a less 'risky ' fund . So it is normally advised that for younger people in pensions to go for the higher risk funds as they have more years to ride out the volatility.

recci

Albermarle said:

recci said:

Thanks, guys, probably just combine them then. Is there a lot more risk with the 'Adventurous fund '? I plan to make more contributions myself especially once my student loan is paid off. I may just divert the same amount I'm paying into the pension. 

When you are talking about mainstream investments like in this pension fund , 'risk' does not mean the risk of losing everything .
What it means is that there is a risk that it will maybe drop in value at some point, maybe by 30% for example. However history shows that in the long term it will go up . So risk really means volatility . So the higher risk funds will go up and down a lot in the short or medium term but is expected to go up more in the long term than a less 'risky ' fund . So it is normally advised that for younger people in pensions to go for the higher risk funds as they have more years to ride out the volatility.

Good answer!