Two old pension - confused! What to do?

Albermarle

Davina_Hart said:

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?

There are numerous SIPP/pension providers, all with different charging structures. Normally though they all have two basic charges .
A charge for running the platform which you pay each month, and then a charge for the investment funds you choose, which is paid out of the fund directly . 
The fund charge for a specific fund is normally the same regardless of which SIPP provider you use.
Then some platforms also charge for other things , like withdrawals, fund switches etc. Some are better value for smaller amounts and some for bigger amounts , it gets quite complicated sometimes. 

NEST just has one ongoing charge of 0.3% for everything which is very competitive. The issue is that initial contributions are charges at 1.8% as a one off , but that does not apply to transfers in. 

As a comparison the best known SIPP provider - HL - charges 0.45% + fund cost ( 0.2% to 1.5% ) although there are cheaper ones. 

Also you should not be taken in by clever marketing .
e.g.  . Strategy ( could mean anything ) fund in sexy SIPP must be better than fund in boring old Nest pension .
 Probably the only thing that you can say nearly for certain is that the 'strategy' fund will be more expensive.

Bobziz

You must really enjoy your job if you're thinking of working until you're 71 ?

Davina_Hart

Albermarle said:

Davina_Hart said:

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?

There are numerous SIPP/pension providers, all with different charging structures. Normally though they all have two basic charges .
A charge for running the platform which you pay each month, and then a charge for the investment funds you choose, which is paid out of the fund directly . 
The fund charge for a specific fund is normally the same regardless of which SIPP provider you use.
Then some platforms also charge for other things , like withdrawals, fund switches etc. Some are better value for smaller amounts and some for bigger amounts , it gets quite complicated sometimes. 

NEST just has one ongoing charge of 0.3% for everything which is very competitive. The issue is that initial contributions are charges at 1.8% as a one off , but that does not apply to transfers in. 

As a comparison the best known SIPP provider - HL - charges 0.45% + fund cost ( 0.2% to 1.5% ) although there are cheaper ones. 

Also you should not be taken in by clever marketing .
e.g.  . Strategy ( could mean anything ) fund in sexy SIPP must be better than fund in boring old Nest pension .
 Probably the only thing that you can say nearly for certain is that the 'strategy' fund will be more expensive.

Many thanks Albermale for explaining so well. 

Make sense. I am going to join the old two pensions with NEST. 

Albermarle

OK but spend some time making sure you understand the investment options within Nest . There are not many so should not be too difficult.