Transfer old DC pensions?

MaterialGirl*

I currently pay into my workplace DC pension with Royal London, a balanced lifestyle strategy. That transfer value is at 55k currently and I’m paying 25% of my salary into it and that includes my employer’s maximum contribution.  

I have two older DC pensions both with Scottish Widows. The last statements show transfer values of £35,864 and £22,207.

I think the higher pension is  “with profits” as is my current work pension.

I’ve not paid into the Scottish Widows pensions  for years and wonder if it makes sense to transfer them into my current pension just to have everything in one pot or to leave them as they are?  

The pension for 22k is invested by fund name (in order of units): Equity, Japanese, North American, Property, European and fixed interest. There’s a mix of investment approaches too. 

Equity: Advanced 
Japanese: Specialist 
North American: Advanced 
Property: Progressive 
European: Advanced 
Fixed interest: Balanced

The higher pension for 33k is with profits and I hold 5,783.80 units at 442.80 pence plus a final bonus and no market value reduction on retirement date.

Im not really sure what any of these units really mean and if I need to change anything, transfer them or just  leave them alone? 

I wouldn’t mind paying for one-off financial advice but I don’t think at these values an IFA would be interested? 

Albermarle

Firstly there is no overriding reason to combine pensions at this stage but there can be some points to think about 
1) Charges 
2) When you come to take the pension it is better to have a more modern pension that offers more flexibility than old ones
3) Ease of monitoring just one pension 

There are some views that it may not be a good idea to merge pensions , but I am not sure if any of them apply to you .
Should I merge my old pension pots into one scheme? | This is Money

Finally the age when you take a pension is set to increase from 55 to 57 and there is still some uncertainty about existing pensions keeping the 55 age. So maybe best not to do anything until this is a bit clearer.

MaterialGirl*

Many thanks Albermarle. That is very helpful. 

I don’t see the charges on my statements so will need to call Scottish Widows to compare them. 

I may just leave everything as it is then for now until we know about the pension age increases. Although my current plan is not to touch my pensions before I’m 57. 

Albermarle

MaterialGirl* said:

Many thanks Albermarle. That is very helpful. 

I don’t see the charges on my statements so will need to call Scottish Widows to compare them. 

I may just leave everything as it is then for now until we know about the pension age increases. Although my current plan is not to touch my pensions before I’m 57. 

Yes charges are not always clear , especially with older pensions.

Be aware that some pensions have two charges . One for the pension itself, often referred to as the platform charge /admin charge/management charge .
Then a charge for the investment funds themselves.
Other pensions just have one all in charge .

Regarding the actual investments your money is in within the three pensions.

A with profits fund is designed to smooth out the ups and downs of the market. It sounds a good idea but they are a bit old fashioned , opaque and tend to have higher charges.

A Lifestyle fund , starts with a more adventurous mix of investments ( means high % equity/shares) and then 'derisks' as you near retirement . So you need to have the right retirement age lodged with the provider for it to work properly.

The £22K pension has far too many funds for a relatively small amount .

So overall a general tidy up would be a good idea at some point .

MaterialGirl*

Many thanks Albermarle, I really appreciate your help. 

How would I decide on funds for the 22k pension? Is there a good place to read up about funds? With my S&S ISA I just  invest in a Vanguard life strategy fund, so I never had to think about it. 

 I think I can switch funds online with that 22k pension.

I’m not sure why the 33k pension is not giving me a breakdown of funds but it’s the oldest pension so I only get annual statement and no online access. I will ask when I call them and also check the retirement age I gave for both pensions.

Albermarle

MaterialGirl* said:

Many thanks Albermarle, I really appreciate your help. 

How would I decide on funds for the 22k pension? Is there a good place to read up about funds? With my S&S ISA I just  invest in a Vanguard life strategy fund, so I never had to think about it. 

 I think I can switch funds online with that 22k pension.

I’m not sure why the 33k pension is not giving me a breakdown of funds but it’s the oldest pension so I only get annual statement and no online access. I will ask when I call them and also check the retirement age I gave for both pensions.

Probably in the £22K pension there is something similar to Vanguard Life Strategy . There is nothing magic about Life strategy it is just a low cost multi asset fund.

For the £33K with profits fund , as I said they are opaque, you do not see what is inside them . 

xylophone

You could consider moving the pensions to Vanguard.

https://www.vanguardinvestor.co.uk/what-we-offer/personal-pension/personal-pension-account

MaterialGirl*

Thank you again Albermarle.

Thank you too Xylophone. I will look into the Vanguard SIPP options as well. Just need to find out what my current charges are. 

Albermarle

MaterialGirl* said:

Thank you again Albermarle.

Thank you too Xylophone. I will look into the Vanguard SIPP options as well. Just need to find out what my current charges are. 

The other option of course is to transfer both SW pensions into your current workplace one , which you will have to keep anyway. Assuming they allow transfers in .
As the sums involved are not huge , then small differences in charges are not so important ( say a difference of 0.1 or 0.2 % ).

If you do decide to transfer then you need to action it via the provider you are transferring to . You do not need to contact the one you are transferring away from . They will contact you if needed.

MaterialGirl*

Thank you again. Yes, my workplace pension will definitely allow transfers in. I’ve not had a chance to call Scottish Widows yet re the charges, but I will do that tomorrow.