Should i move my company pension to a SIPP

ender4

I have a pension with an old employer with £150k+ in it. It's a defined contribution scheme. 
I don't work for that employer anymore & I don't retire for at least another 20 years.

The pension only has a choice of 8 funds that you can invest in, and i am in is the 'highest' risk one. I looked at the fund, and for me its really 'low-risk' - basically USA, UK, Western Europe, massive companies (including a tobacco company - urgh). It chugs along making 2-5% a year (ignoring covid).  I prefer to be mainly invested in Emerging, Asia, etc, and am comfortable with the risk of that. 

1) Should i move the company pension to a SIPP?  Is the main benefit being able to choose my own funds?

2) What potential benefits could i lose by moving out of the company pension?  I don't work there anymore and won't take the pension for at least 20 more years.

3) There will probably be charges by transferring, but i feel like i'll easily make that back over the next 10 years. Is that a good way to look at it?

4)  I already use Fidelity for my shares ISA's, investment trusts, a bit of share dealing, so like that platform.  Is Fidelity recommended as a platform to open a SIPP?

5) The pension is already on Fidelity platform as the employer uses Fidelity - does that make a difference?

6) What have i forgotten about in this analysis?

Thanks for any help, whilst i'm ok with finance matters generally, i've never really looked at pensions.

AlanP_2

ender4 said:

I have a pension with an old employer with £150k+ in it. It's a defined contribution scheme. 
I don't work for that employer anymore & I don't retire for at least another 20 years.
The pension only has a choice of 8 funds that you can invest in, and i am in is the 'highest' risk one. I looked at the fund, and for me its really 'low-risk' - basically USA, UK, Western Europe, massive companies (including a tobacco company - urgh). It chugs along making 2-5% a year (ignoring covid).  I prefer to be mainly invested in Emerging, Asia, etc, and am comfortable with the risk of that. 

1) Should i move the company pension to a SIPP?  Is the main benefit being able to choose my own funds?
2) What potential benefits could i lose by moving out of the company pension?  I don't work there anymore and won't take the pension for at least 20 more years.
3) I guess there will be charges by transferring, but i feel like i'll easily make that back over the next 10 years. Is that a good way to look at it?
4)  I already use Fidelity for my shares ISA's, investment trusts, a bit of share dealing, so like that platform.  Is Fidelity recommended as a platform to open a SIPP?
5) The pension is already on Fidelity platform as the employer uses Fidelity - does that make a difference?
6) What have i forgotten about in this analysis?

Thanks for any help, whilst i'm ok with finance matters generally, i've never really looked at pensions.

1) Yes, although don't ignore charges but not typically a big issue
2) None (assuming there are no special / safeguarded benefits)
3) Unlikely although new provider will charge in some way for holding and / or buying investments
4) One of the most common names to come up on here. Whether it will be the best for you depends on what you invest in as ITs / ETFs / Shares are charged per transaction as opposed to funds at a %'age. Other platforms may be cheaper for your overall mix.
5) Probabaly not, its still a transfer. Ask Fidelity?
6) What other pensions you have, overall objectives and how a volatile EM / Asia pot fits in to that possibly.

Albermarle

5) Probabaly not, its still a transfer. Ask Fidelity?

Fidelity are fine for a SIPP . Although their overall % charge is not the cheapest , there are no extra charges for drawdown, with drawals , paper copies etc 

Fidelity offer regular cashback deals for transferring a pension to them . £50K gets £100; £150 K gets £500 etc .

When you call them ask if a kind of in house transfer like you will maybe do will qualify, and when is the next cashback offer due to start.

It should not be a major factor in your decision, but every little helps of course.

Costabit

ender4 said:

I have a pension with an old employer with £150k+ in it. It's a defined contribution scheme. 
I don't work for that employer anymore & I don't retire for at least another 20 years.

The pension only has a choice of 8 funds that you can invest in, and i am in is the 'highest' risk one. I looked at the fund, and for me its really 'low-risk' - basically USA, UK, Western Europe, massive companies (including a tobacco company - urgh). It chugs along making 2-5% a year (ignoring covid).  I prefer to be mainly invested in Emerging, Asia, etc, and am comfortable with the risk of that. 

1) Should i move the company pension to a SIPP?  Is the main benefit being able to choose my own funds?

2) What potential benefits could i lose by moving out of the company pension?  I don't work there anymore and won't take the pension for at least 20 more years.

3) There will probably be charges by transferring, but i feel like i'll easily make that back over the next 10 years. Is that a good way to look at it?

4)  I already use Fidelity for my shares ISA's, investment trusts, a bit of share dealing, so like that platform.  Is Fidelity recommended as a platform to open a SIPP?

5) The pension is already on Fidelity platform as the employer uses Fidelity - does that make a difference?

6) What have i forgotten about in this analysis?

Thanks for any help, whilst i'm ok with finance matters generally, i've never really looked at pensions.

In answer to Q5 above, I recently transferred some money from Fidelity Workplace pension to my Fidelity SIPP. It was no quicker or slower , no better or worse than any previous transfers I have done from this Workplace pension eg. to Vanguard or HL.
The funds still needed to be sold before the transfer happened as cash and then new funds purchased.Took a couple of weeks in total I seem to recall.
Oh, and unfortunately Fidelity to Fidelity didn’t qualify for the cash back bonus which was running at the time

Albermarle

Oh, and unfortunately Fidelity to Fidelity didn’t qualify for the cash back bonus which was running at the time

Shame on them 

Steve182

I was in a similar position to you 4 years ago. My company pension was with Welplan which had a choice of at most a dozen L & G funds, only 2 or 3 of which were purely equity. That pension too was struggling to make meaningful returns and the funds rarely reached their benchmark.

I wanted to transfer out to a SIPP and manage my own more ambitious investments but my dilemma was that Welplan pension had 41% tax free cash that I would normally lose if I transferred out. A year later I bit the bullet and did a block transfer with a colleague to an AJ Bell SIPP so we both met the criteria needed to retain the previous pension's benefits.

Touch wood I've been really fortunate, that SIPP is up 68% in just over 3 years with no further contributions. I've never looked back! Of course my higher risk investments may not always pay such handsome rewards and I'm prepared for that.