Sanity check on pension transfers

Brie

As I line up all my various money ducks I'm having to review what's in my DC plans. 

I have 2 that I'm currently looking at, neither of which are particularly huge but will help add to the party lifestyle I would like to enjoy in future years.  

I know that both of these have taken a down turn with the stock market.  One was at £21k a couple of years back, climbed up to £28k at the beginning of the year and has drifted back down to about £23k now.  One part of my brain is telling me to wait until the value goes back up to £28k before transferring.  But the other part is saying that waiting doesn't matter because assuming I move it into similar investments the increase in value can wait in the new set of funds.  Does this make sense?

I'm not thinking about fees of any sort at this point - but given that these are both work pensions I suppose the longer I leave the funds the less fees I will actually have to pay if the (ex)employers are paying for the fund.

The plan is to amalgamate and do draw down at some point.  An IFA has suggested starting this sooner rather than later to take advantage of a nil tax rate while I'm underemployed but that might not be started until the next tax year.   

Any words of wisdom would be delightfully received.

Albermarle

Brie said:

As I line up all my various money ducks I'm having to review what's in my DC plans. 

I have 2 that I'm currently looking at, neither of which are particularly huge but will help add to the party lifestyle I would like to enjoy in future years.   Maybe will have to be an Aldi Prosecco lifestyle, instead of a Champagne one though 

I know that both of these have taken a down turn with the stock market.  One was at £21k a couple of years back, climbed up to £28k at the beginning of the year and has drifted back down to about £23k now.  This looks pretty normal One part of my brain is telling me to wait until the value goes back up to £28k before transferring.  But the other part is saying that waiting doesn't matter because assuming I move it into similar investments the increase in value can wait in the new set of funds.  Does this make sense? Yes, the usual advice is not to cash out when investments are down, but if you transfer to similar investments that advice does not really apply.

I'm not thinking about fees of any sort at this point - but given that these are both work pensions I suppose the longer I leave the funds the less fees I will actually have to pay if the (ex)employers are paying for the fund. Assuming these are DC pensions , it is unusual for employers to pay the fees for you. Are you sure this is the case?
In any case fees are not so important as investing correctly and minimising tax .

The plan is to amalgamate and do draw down at some point.  An IFA has suggested starting this sooner rather than later to take advantage of a nil tax rate while I'm underemployed but that might not be started until the next tax year.   

Any words of wisdom would be delightfully received.

See in bold 

Brie

@Albermarle

Thanks - quite happy with the £7.99 Cremant du Jura from Aldi so that's ok.

And I'll double check on the fees.

dunstonh

The plan is to amalgamate and do draw down at some point.  An IFA has suggested starting this sooner rather than later to take advantage of a nil tax rate while I'm underemployed but that might not be started until the next tax year.   

That makes sense as even if you don't need all the income that generates, you can put the excess back onto the platform using the ISA wrapper.

Marcon

Brie said:

I'm not thinking about fees of any sort at this point - but given that these are both work pensions I suppose the longer I leave the funds the less fees I will actually have to pay if the (ex)employers are paying for the fund.

The employer won't be paying any of the charges if these are group personal pensions, which is the most likely set up these days. You'll be paying them, and they will vary depending on the fund(s) in which you've chosen to invest.

If it's a trust based occupational scheme, the employer is likely to be paying the admin/running costs, but again, not the charges on an individual's choice of fund(s).

Brie

@Marcon
definitely not GPP but DC OPS.  But I'll check it out in any case.

Albermarle

Brie said:

@Marcon
definitely not GPP but DC OPS.  But I'll check it out in any case.

Be aware that fund charges are paid directly from the fund, so you would not see any explicit charge going out of your pension.

wjr4

dunstonh said:

The plan is to amalgamate and do draw down at some point.  An IFA has suggested starting this sooner rather than later to take advantage of a nil tax rate while I'm underemployed but that might not be started until the next tax year.   

That makes sense as even if you don't need all the income that generates, you can put the excess back onto the platform using the ISA wrapper.

What about if they have an IHT issue?

dunstonh

wjr4 said:

dunstonh said:

The plan is to amalgamate and do draw down at some point.  An IFA has suggested starting this sooner rather than later to take advantage of a nil tax rate while I'm underemployed but that might not be started until the next tax year.   

That makes sense as even if you don't need all the income that generates, you can put the excess back onto the platform using the ISA wrapper.

What about if they have an IHT issue?

Where it is an issue, then it comes into play in the decision making.  Although it doesn't seem to be an issue for the OP in this case.

Brie

dunstonh said:

wjr4 said:

dunstonh said:

The plan is to amalgamate and do draw down at some point.  An IFA has suggested starting this sooner rather than later to take advantage of a nil tax rate while I'm underemployed but that might not be started until the next tax year.   

That makes sense as even if you don't need all the income that generates, you can put the excess back onto the platform using the ISA wrapper.

What about if they have an IHT issue?

Where it is an issue, then it comes into play in the decision making.  Although it doesn't seem to be an issue for the OP in this case.

I should be so lucky!!!