Two old pension - confused! What to do?

Davina_Hart

Hello kind people, 

I have two old work pension - one has a small pot of about £1500 approx. from an employer who I left in 2015. This pension is with Fidelity and money is invested in their Lifestyles fund. There are no charges to move the pension funds. 

The second pension is with an employer who I left recently after working there from 2017 to 2021, a little over 4 years. This pension is with Royal London. I have about £16,000 approx. as per the current value and funds are invested in their Balanced Lifestyle Strategy. I have to check with them if and how much are the charges to move the pension fund. 

Both old pension have some annual charges. I am unable to gauge as to what it is for Fidelity's, but Royal London plan has charges of 0.60% of total plan value before transaction costs plus some other charges. 

My current employer has pension with NEST and money is invested in NEST Retirement Date Fund. I have a few questions and would really appreciate if I can get some opinion or suggestion please:

-  Merge old pension with current work pension, NEST

-  I am also thinking about moving two old pensions into Vanguard personal pension SIPP and manage 

-  Is there any other option that I can utilise

Regards, 

Davina

MallyGirl

Since the numbers are fairly small you could transfer both into NEST - they don't charge the contribution fee on transfers and the annual management charge is 0.3%

How old are you and when are you thinking to retire? Do you have other pensions/savings?

xylophone

https://www.thisismoney.co.uk/money/pensions/article-3550085/STEVE-WEBB-merge-small-pension-pots.html

might be of interest.

You have set out your options which are to stick with what you have or transfer out into another scheme, whether Nest or something else.

You have a wide choice of pensions into which you could transfer.

https://www.moneysavingexpert.com/savings/cheap-sipps/

If you choose to transfer these pensions into NEST, had you thought of  investing the money in one of one of their funds in which you are not currently invested?

https://www.nestpensions.org.uk/schemeweb/nest/aboutnest/investment-approach/other-fund-choices.html

xylophone

https://www.pensionsage.com/pa/Nest-reports-year-of-growth-as-covid-19-hits-investment-returns.php

Might be worth a read.

Davina_Hart

MallyGirl said:

Since the numbers are fairly small you could transfer both into NEST - they don't charge the contribution fee on transfers and the annual management charge is 0.3%

How old are you and when are you thinking to retire? Do you have other pensions/savings?

Thanks for replying. I am currently 35 years old. I am thinking to retire in 2057. 
No I do not have any other pension apart of the two old and one current.

Marcon

Davina_Hart said:

Hello kind people, 

I have two old work pension - one has a small pot of about £1500 approx. from an employer who I left in 2015. This pension is with Fidelity and money is invested in their Lifestyles fund. There are no charges to move the pension funds. 

The second pension is with an employer who I left recently after working there from 2017 to 2021, a little over 4 years. This pension is with Royal London. I have about £16,000 approx. as per the current value and funds are invested in their Balanced Lifestyle Strategy. I have to check with them if and how much are the charges to move the pension fund. 

Both old pension have some annual charges. I am unable to gauge as to what it is for Fidelity's, but Royal London plan has charges of 0.60% of total plan value before transaction costs plus some other charges. 

My current employer has pension with NEST and money is invested in NEST Retirement Date Fund. I have a few questions and would really appreciate if I can get some opinion or suggestion please:

-  Merge old pension with current work pension, NEST

-  I am also thinking about moving two old pensions into Vanguard personal pension SIPP and manage 

-  Is there any other option that I can utilise

Regards, 

Davina

All pensions have annual charges, although as you have found, it isn't always easy to work out what they are! Ask Fidelity to confirm.

Davina_Hart

xylophone said:

https://www.thisismoney.co.uk/money/pensions/article-3550085/STEVE-WEBB-merge-small-pension-pots.html

might be of interest.

You have set out your options which are to stick with what you have or transfer out into another scheme, whether Nest or something else.

You have a wide choice of pensions into which you could transfer.

https://www.moneysavingexpert.com/savings/cheap-sipps/

If you choose to transfer these pensions into NEST, had you thought of  investing the money in one of one of their funds in which you are not currently invested?

https://www.nestpensions.org.uk/schemeweb/nest/aboutnest/investment-approach/other-fund-choices.html

xylophone said:

https://www.thisismoney.co.uk/money/pensions/article-3550085/STEVE-WEBB-merge-small-pension-pots.html

might be of interest.

You have set out your options which are to stick with what you have or transfer out into another scheme, whether Nest or something else.

You have a wide choice of pensions into which you could transfer.

https://www.moneysavingexpert.com/savings/cheap-sipps/

If you choose to transfer these pensions into NEST, had you thought of  investing the money in one of one of their funds in which you are not currently invested?

https://www.nestpensions.org.uk/schemeweb/nest/aboutnest/investment-approach/other-fund-choices.html

Thanks xylophone for sharing the weblinks

Its interesting to know there are other funds to choose with NEST. I am looking to change from default to high risk as I still have a long time to retire so I am all up for the risk. 

In terms of the old two pension, I will look to transfer both to Vanguard SIPP to take the control in my hands. Probably be a silly question, is there any tax implications when managing personal pension?

MallyGirl

Davina_Hart said:
Thanks xylophone for sharing the weblinks

Its interesting to know there are other funds to choose with NEST. I am looking to change from default to high risk as I still have a long time to retire so I am all up for the risk. 

In terms of the old two pension, I will look to transfer both to Vanguard SIPP to take the control in my hands. Probably be a silly question, is there any tax implications when managing personal pension?

There are no tax implications for a basic rate tax payer. If you earn over £50k then you need to tell the tax man about future contributions but if it is going to just sit there then all is good.
You should definitely consider more equity since the values are low and you are a long way from retirement. The important aspect of a SIPP is the SI bit - Self Invested meaning you have to choose your investments.

Davina_Hart

MallyGirl said:

Davina_Hart said:
Thanks xylophone for sharing the weblinks

Its interesting to know there are other funds to choose with NEST. I am looking to change from default to high risk as I still have a long time to retire so I am all up for the risk. 

In terms of the old two pension, I will look to transfer both to Vanguard SIPP to take the control in my hands. Probably be a silly question, is there any tax implications when managing personal pension?

There are no tax implications for a basic rate tax payer. If you earn over £50k then you need to tell the tax man about future contributions but if it is going to just sit there then all is good.
You should definitely consider more equity since the values are low and you are a long way from retirement. The important aspect of a SIPP is the SI bit - Self Invested meaning you have to choose your investments.

Thank you MallyGirl. 
 
Yes the idea to open SIPP is to leave the money in one pot where I will make a decision on the fund to choose from. 
I earn over 50K but as you said if the money from the two old pension is going to sit then there is no need to inform the tax man. 

Albermarle

I do not fully follow why you want to complicate things a little by having a separate SIPP, that will probably be a bit more expensive than Nest .
So far I do not think you have actually checked the range of investments available in Nest ?

Anyway whatever route you take , increasing your current level of contributions ( if possible ) will have a much bigger effect than anything else. Especially as you are a higher rate taxpayer , as higher rate tax relief is very generous , although it depends on how much you actually pay .

Davina_Hart

Albermarle said:

I do not fully follow why you want to complicate things a little by having a separate SIPP, that will probably be a bit more expensive than Nest .
So far I do not think you have actually checked the range of investments available in Nest ?

Anyway whatever route you take , increasing your current level of contributions ( if possible ) will have a much bigger effect than anything else. Especially as you are a higher rate taxpayer , as higher rate tax relief is very generous , although it depends on how much you actually pay .

Thanks Albermarle

You are right, I haven't fully checked the range of investments options available in NEST. 

I just want to amalgamate old work pensions and leave the current pension with present employer as is. I have read about SIPP that can be used to merge old pensions and have freedom to choose the strategy funds rather than a random fund manager of pension firm making the decision. 

Are you saying NEST is cheaper to run than SIPP?