I have a very small pension from an old job, I’m 27, what is best?

joshhbowenn

I have a very small pension from an old part time job which equates to approx £850. There is an admin charge of £18 a year from where the pension is held. 

I personally would want to take this out so I can use it as it’s so small, but if it can’t be taken then do I move it into my current local government pension because of the yearly fee’s? 

Silvertabby

How long have you been in the LGPS?

I ask because there's a 12 month limit on transfers in.  If you still have time then, yes, a transfer may well be the best thing to do with such a small pension.

Brie

You can't take it out if by that you mean until you are at least 55 so a little while yet.  And potentially as you approach that age the guideline may change it it may be 60 or more.  

If you can't move it to the LGPS then maybe you could shop around for another private pension scheme that would have lower annual fees.  Or get another p/t job that does contributions to NEST or another OPS and transfer it to that.

MallyGirl

joshhbowenn said:

I have a very small pension from an old part time job which equates to approx £850. There is an admin charge of £18 a year from where the pension is held. 

I personally would want to take this out so I can use it as it’s so small, but if it can’t be taken then do I move it into my current local government pension because of the yearly fee’s? 

Given that you can't take it out, if you can't transfer into LGPS then just find a new provider that charges a percentage based fee rather than fixed, choose a fund (you could be quite adventurous in terms of percentage of equities) and then leave it alone.
https://www.moneysavingexpert.com/savings/cheap-sipps/

Marcon

Brie said:

You can't take it out if by that you mean until you are at least 55 so a little while yet.  And potentially as you approach that age the guideline may change it it may be 60 or more.  

Already at least 57 for someone currently aged 27 (increases from 55 to 57 in 2028).

Brie said:

If you can't move it to the LGPS then maybe you could shop around for another private pension scheme that would have lower annual fees.  Or get another p/t job that does contributions to NEST or another OPS and transfer it to that.

Why transfer to NEST when it has a higher annual charge (0.3%) than OP is paying for their current plan (0.21%)?

OP - any private pension is going to charge an annual fee (based on a %age of your fund value) and what you're paying now is a pretty good deal. Sometimes having more than one pension scheme can be handy as the years roll on, although maybe not a whole collection of them!

Marcon

MallyGirl said:

joshhbowenn said:

I have a very small pension from an old part time job which equates to approx £850. There is an admin charge of £18 a year from where the pension is held. 

I personally would want to take this out so I can use it as it’s so small, but if it can’t be taken then do I move it into my current local government pension because of the yearly fee’s? 

Given that you can't take it out, if you can't transfer into LGPS then just find a new provider that charges a percentage based fee rather than fixed, choose a fund (you could be quite adventurous in terms of percentage of equities) and then leave it alone.
https://www.moneysavingexpert.com/savings/cheap-sipps/

Unlikely to be a fixed fee given that it will be a recent contract. I suspect OP is, understandably, just going on one statement and looking at the charge on that (although happy for OP to correct me if I'm wrong!).

Albermarle

Another possibility is that you could start contributing to it and make it bigger. The fact that you no longer work for that employer is normally not relevant.

Of course it depends on a few things whether this would be the right thing to do with any spare money you have, but useful to be aware of it as a possibility

joshhbowenn

Thanks all. Obviously at 27 pension knowledge is limited so appreciate the advice! I will look at options advised. 

greatkingrat

Marcon said:

Why transfer to NEST when it has a higher annual charge (0.3%) than OP is paying for their current plan (0.21%)?

OP - any private pension is going to charge an annual fee (based on a %age of your fund value) and what you're paying now is a pretty good deal. Sometimes having more than one pension scheme can be handy as the years roll on, although maybe not a whole collection of them!

The OP is paying 2.1%, not 0.21% (although I suspect it is probably a flat rate charge rather than a percentage).

Albermarle

joshhbowenn said:

Thanks all. Obviously at 27 pension knowledge is limited so appreciate the advice! I will look at options advised. 

Just be aware that your LGPS/public sector pension is a very valuable thing to have. If you move jobs out  of the public sector, to one with a more standard DC scheme, you need a significant hike in salary to compensate.