Merging Work Pension & SIPP, Need a new provider

Corbula

I've been given the opportunity to move my work pension away from NEST and move into my SIPP which I would jump at the chance to have it all in one pot. Also I can continue to contribute myself (£150) plus my contribution out of my salary and my employers contribution all going into the one pot.

My current SIPP is with Vanguard which I've found out don't except payments from an employer so I'm looking to transfer to a new provider. 

The fund my SIPP in invested in is Vanguard FTSE Global All Cap. Who would be best to transfer this too and how do I go about it to transfer the fund and to have my employer paying into it as well.

AL Bell, HL or Fidelity are my top choices.

Just a side note as I know it will come up about salary sacrifice. While a good idea, I just can't reduce my take home pay at the moment as I have very little spare each month with the cost of everything increasing. Maybe in the future.

Brie

My understanding is that salary sacrifice doesn't reduce your take home pay. In fact it might actually be beneficial.

Albermarle

How do you make your current contributions out of your salary ?

All the three SIPP providers you mentioned would be fine and you could hold that Vanguard fund with all of them. Normally you can just open a SIPP online in a few minutes, but as there will be employer payments you will no doubt have to talk to them first. They will presumably ask the same question as I have asked above.

DeLaSole

Hi Corbula,

Comparefundplatforms.com is a site you can use to get an idea of where might be most cost-effective with whatever circumstances you have. At a certain point, %-based providers like those you've named can be more costly compared to a fixed-fee provider such as ii. So if moving away from the Vanguard Personal Pension to a Sipp elsewhere, but wanting to keep the same Vanguard fund at the new provider, then it will partly depend on what pot level you have, if you're looking to keep costs down. 

As for the transfer, you'll complete an application with the new provider to request the transfer in of your Vanguard pension. So long as the new provider offers the fund you have, you could ask to transfer 'in-specie' - you'll remain in the market and your holding is re-registered and moved across. Alternatively, you can select to be cashed out of the Vanguard fund and move to the new provider in cash. While this may be quicker, you will miss any gains/losses the fund experiences.

I'm S/E myself but providers accepting employer contributions will surely just have a direct debit form for you and your employer to fill out if it's a monthly contribution. 

Best wishes.

(I see dunstonh below raising things and so my layperson post should be read as such!) 

dunstonh

This could be more complicated than you or your employer thinks.   

Potential issues are:
1 - Employer contributions are handled differently by different providers.  Some want an employer payer form every time the amount changes.  
2 - The employer has no control over the keyed into the platform.  If your pension payments vary from month to month, this could be an administration headache for you and the employer.
3 - Technically, you are an opt out and many schemes will not accept opt-outs

Some of these things can be resolved with fudges or workarounds but it really depends on whether your employer is open to the extra work and risks.

Corbula

Albermarle said:

How do you make your current contributions out of your salary ?

All the three SIPP providers you mentioned would be fine and you could hold that Vanguard fund with all of them. Normally you can just open a SIPP online in a few minutes, but as there will be employer payments you will no doubt have to talk to them first. They will presumably ask the same question as I have asked above.

The work pension is an auto enrolment one so the contributions just get taken out of my gross wage each month. NEST has a direct debit set so each time the schedule gets processed the contributions get taken from the company bank account. We're only a very small company so I actually process NEST myself.

dunstonh said:

This could be more complicated than you or your employer thinks.   

Potential issues are:
1 - Employer contributions are handled differently by different providers.  Some want an employer payer form every time the amount changes.  
2 - The employer has no control over the keyed into the platform.  If your pension payments vary from month to month, this could be an administration headache for you and the employer.
3 - Technically, you are an opt out and many schemes will not accept opt-outs

Some of these things can be resolved with fudges or workarounds but it really depends on whether your employer is open to the extra work and risks.

I will speak with them and see what they require, what there process is. The employers part of it is a fixed percentage so it only changes if my salary changes with a pay rise, so it's the same every month.

Can you expand on point 3 please? Are you meaning I might not be able to move away from NEST?

Albermarle

The work pension is an auto enrolment one so the contributions just get taken out of my gross wage each month.

To be clear any pension contributions, including auto enrolment ones, can be taken by three different methods; from pre tax pay, post tax pay or by salary sacrifice.

It needs to be clear to any new provider how you are doing it.

dunstonh

Can you expand on point 3 please? Are you meaning I might not be able to move away from NEST?

If you leave the workplace pension scheme, you become classified as an opt out.   They have to opt you back in periodically and then you have to opt out again.    Opt-outs are a high risk category and in most cases, it best to be opted in rather than opted out.   So, some providers will ask the question as to whether you are in or out and refuse to offer their product if you are out.

In your case, its a bit more unusual as your employer is going to still pay the equivalent amount into the pension.   

 The employers part of it is a fixed percentage so it only changes if my salary changes with a pay rise, so it's the same every month.

This means your employer will need to get you to change the amount as they will not be able to do it themselves.   This bit can get messy if forgotten as usually its the payroll team that do the pension contributions.  Plus, often one payment in the year could be different from the rest as it a balancing amount to ensure round figures.

Albermarle

I've been given the opportunity to move my work pension away from NEST and move into my SIPP which I would jump at the chance to have it all in one pot.

Just to go back to the original post. There is often little advantage to having one pension instead of two, so not sure if all the potential hassle is really worth it ?

Corbula

Albermarle said:

I've been given the opportunity to move my work pension away from NEST and move into my SIPP which I would jump at the chance to have it all in one pot.

Just to go back to the original post. There is often little advantage to having one pension instead of two, so not sure if all the potential hassle is really worth it ?

It all came about because my boss was getting pension advice for herself from a pension advisor and they said if you can stay away from NEST as the returns are very poor with the standard portfolios, so my boss said if I wanted it can just be moved into my pension as its been doing well and I get my own choice of where it is invested. Then instead of the payment going to NEST it goes to the other pension instead. 

I will be honest I didn't see a hassle. For us there's only 5 people working there. On NEST it already has everyone's gross wages, each month I just press a button that copies from the previous month, the contributions are auto calculated as a percentage of their gross wage. Then it says send payment, a few days later a direct debit is taken from our bank. There's no actual input or processing from our side. 

We thought it would be simple that the direct debit goes to another account instead of NEST. 

Albermarle

It all came about because my boss was getting pension advice for herself from a pension advisor and they said if you can stay away from NEST as the returns are very poor with the standard portfolios,

I am not an expert on Nest funds but I can see that the Sharia fund ( 100% equities and with a significant big tech holding) is up 94% in 5 years . I think we would all be very happy with that !

The Higher risk fund, is about 70% equities and is 34% up over 5 years, which compares favourably with other popular multi asset funds at around that level of equities ( typically showing around 20% growth)