Can anyone help me understand my 3 Section plans ?

wazza99

I have had for 15+ years 3 Section 32 plans with SW. They came about when i left my old employer (Direct Line) and some "chap" ifa/fa ? came round for whatever reason moved me to them, i apologise for being naïve and not knowing why, i was young and un-interested !
So one plan says Payments in £11922, next says £0, last says £20583. All we're opened July 2005 (with no additional payments since day 1 as i have a new Lloyds pension). Current values are £32376, £368, £53975 respectively.

All pensions are defined contribution benefit, im a lower rate tax payer, my wife pays 0 tax as she only earns £12500 approx. She has no pension but full state contributions, although she has just been enrolled in the employer pension in the last few years on minmum contributions.

So a few question why do i have 3 ? (especially the £0 one now worth £368 but seems stagnant, actually this one does not say sec32 buyout just pension plan )
Would it be worth moving all 3 to my current Lloyds pension ? (pot around £130k), they say it would be acceptable.
Would there be any benefit in transferring the pot to my wifes ?? is that even possible ?
I assume im paying fees per pot ?
Growth (well loss's this year) seem similar on both SW and Lloyds around 10%
I can't see any benefits in the plan except a death benefit on each.(50% to buy a plan for my spouse.)

dunstonh

So a few question why do i have 3 ?

three different sources?  (maybe the original pension was broken into three sections or version).  Maybe one is protected rights and another is excess. 

Would it be worth moving all 3 to my current Lloyds pension ? (pot around £130k), they say it would be acceptable.

Have you checked for safeguarded benefits?  Did you tell Lloyds that they were section 32 buy out bonds rather than personal pensions?

Would there be any benefit in transferring the pot to my wifes ?? is that even possible ?

You cant.

I assume im paying fees per pot ?

Unlikely with a 2005 pension.  Most in that era are mono charged.  So whether you have one pension or 10 pensions, the costs would be the same  if from the same provider.  (not a 100% rule but statistically most likely)

Growth (well loss's this year) seem similar on both SW and Lloyds around 10%

Lloyds own SW and most Lloyds funds are run by SW.

xylophone

She has no pension but full state contributions, although she has just been enrolled in the employer pension in the last few years on minmum contributions.

Then she has a pension....  

I have had for 15+ years 3 Section 32 plans with SW. They came about when i left my old employer (Direct Line) and some "chap" ifa/fa ? came round for whatever reason moved me to them, 

https://www.financialadvice.net/s32_buy_out_plan/zone/1288

Direct Line used to have (possibly still offers?) a Defined Benefit Pension Scheme.

If so, it is almost certain that it was contracted out and if you were a member pre 1997 you will have a GMP. After 1997 there would be s9 (2B) rights.

I am somewhat puzzled as to why you have three policies - perhaps you could check the reason with SW at the same time as you check on whether any of the policies (individually or in aggregate) offer "safeguarded benefits".

See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Albermarle

She has no pension but full state contributions, although she has just been enrolled in the employer pension in the last few years on minmum contributions.

So she does have a pension?

Not sure if this is relevant, but she can add more than the minimum and still get tax relief, even though she pays no tax. Or you could give her a lump sum to pay into her pension ( the size of the lump sum would be limited by her salary though)

It is generally a good idea to have some balance in  pension provision between spouses, if possible.

wazza99

Sorry to clarify some points, yes 2 polices do mention section 9 (2b) rights. Yes my wife does now have pension but the pot is so small its almost worthless. None of the documents mention a yearly fee for management, nor any safeguearded benefits bar death benefit of 50%. I will have to double check if i made it clear they were sec32 to Lloyds, does that imply it may cause an issue ?

I think the 3 amounts came from the fact the company was National Breakdown, then Direct Line, then RBS.

So as for my wife i could give her 12500 to invest in her pension but no more per year ?

Thanks all for your replies. 

xylophone

You have stated that your Lloyds pension is a DC pension and so offers flexible benefits.

You have S32 pension policies which  appear to offer safeguarded benefits  valued in excess of £30,000.

You can check this with SW.  They should be able to confirm their requirements for a transfer out - if the benefits are safeguarded as above, then specific financial advice will be required.

Read the link in my previous concerning the advice requirement.

See https://adviser.royallondon.com/technical-central/pensions/transfers/safeguarded-benefits/

Yes my wife does now have pension but the pot is so small its almost worthless.

She does have "relevant earnings" and is aged under 75 so is eligible to receive tax relief on her contributions to a pension scheme offering "relief at source".

In which pension scheme is your wife enrolled? Are her contributions made on a "relief at source" basis?

https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/tax-relief-and-your-pension

If "net pay" she could consider opening a pension with another provider to enable her to make contributions and receive tax relief.

Secret2ndAccount

wazza99 said:

...
So as for my wife i could give her 12500 to invest in her pension but no more per year ?
...

You could give her just under 10,000. If she puts 10,000 into a SIPP, it will be topped up to 12,500 by the taxman. I said into a SIPP. If you are keen to have all her pension in one pot, it should be possible to make a one-off payment back to her employer's scheme, but make sure they are clear that she will get the tax relief added. Or just open her own SIPP.
Note that you/she can't quite put in the full 10,000 as she has already made some contributions. Need to go a bit less. From April 6th to Apr 5th, her total personal contributions, including any added tax relief, but not counting her employer's contributions, cannot exceed her earnings. So you have until March/April to sort this for this tax year's money.

Edited to add: Yes, she's entitled to the tax uplift even though she's not paying any tax.