Found an old pension pot - what to do

Nimb

My stepdad has just found that he has a Standard Life with profits pension (invested in it from 1995 to 2001) and is now currently sitting at approx 36k. He has no understanding of the pension market and was asked for my help but my knowledge is more about modern pensions products such as SIPPs.

As a bit of a background he has just turned 64 and has no other savings but will receive a full state pension. He is due his SP in 2 years time but may defer it if he can keep working.

He is currently setting up access to Standard Life so I will be able to look at the details once this is set up.

He has asked if he should start adding to the pot now and I am not sure if this is the best decision or even possible as it is an old scheme. Would he be better off paying into a SIPP even thought it would probably only be for a few years ?

any background info on this type of old policy would also be much appreciated 

xylophone

It is possible that he chose to contract out of SERPS into a personal pension (although if he does not remember doing so, this seems less likely than his having been enrolled in an employer's DC pension scheme) - is this a possibility?

Or is there any possibility that he was in a DB scheme that was transferred into a S32 policy?

It may not be possible to continue to  contribute to this pension, but it may be possible to transfer into eg a SIPP and continue to contribute or even to transfer into his current workplace pension ( if he has one) and the scheme would accept it) but all will depend on the nature of the SL pension.

Perhaps you could return to the forum when he has details of the pension and options on offer.

Brie

If he is working he should have access to a work pension - it might just be NEST or similar but it would be great to continue with that as he would then also get the employer's contributions paid in to it as well.  That will boast thing a bit even over a short term.  It's likely that he would be able to pay extra into whatever work scheme there is and that may be the most efficient thing rather than having a second (or third) set of charges on another pension pot.  

Marcon

Brie said:

It's likely that he would be able to pay extra into whatever work scheme there is and that may be the most efficient thing rather than having a second (or third) set of charges on another pension pot.  

Given that charges on modern pension pots are almost invariably based on fund value, it doesn't really matter how many sets of charges you have. A (very) few schemes offer some sort of discounting structure for higher value pots, but these are fairly uncommon and wouldn't be much use to a pot valued at under £50K.

In the old days, where there was often a flat-rate monthly charge, it mattered a lot!

Albermarle

Nimb said:

My stepdad has just found that he has a Standard Life with profits pension (invested in it from 1995 to 2001) and is now currently sitting at approx 36k. He has no understanding of the pension market and was asked for my help but my knowledge is more about modern pensions products such as SIPPs.

As a bit of a background he has just turned 64 and has no other savings but will receive a full state pension. He is due his SP in 2 years time but may defer it if he can keep working.

He is currently setting up access to Standard Life so I will be able to look at the details once this is set up.

He has asked if he should start adding to the pot now and I am not sure if this is the best decision or even possible as it is an old scheme. Would he be better off paying into a SIPP even thought it would probably only be for a few years ?

any background info on this type of old policy would also be much appreciated 

To be correct he seems he has a Standard Life DC ( Defined Contribution) pension.
A SIPP is also a DC pension and they are bound by the same legal and tax rules ( SIPP's are marketed as some kind of new fashionable pension but they are not really).
Within the SL pension the money is invested in a 'with profits' investment fund.
These are designed to smooth out the ups and downs of the market, by keeping money back in the good times to be used in the bad times. They are a bit opaque and old fashioned but not necessarily a bad investment. 
Adding more to a pension in his last years of working is most likely a good idea. Wether it is to the SL pension ( if it is allowed) or a new SL pension or a pension with another provider is less important.
As already asked does he not have a current workplace pension, or is he maybe self employed?

Nimb

Appreciate all the replies 

A bit of an update 

having looked at his state pension I see COPE payment listed so does indeed look like he was contracted out via SERPS.

I did give him a nudge a while back about joining the company pension scheme but no joy - next time I am talking to him I while try and sell it a bit more.

He now has online access to the account so I will hopefully have a look at it in the next week or two and come back if I have any more queries

xylophone

I did give him a nudge a while back about joining the company pension scheme but no joy 

Perhaps if you explained that in effect he is accepting a cut in salary, because he is turning down an employer contribution to his retirement provision.

Does his state pension forecast show that he is entitled to at least a full new state pension?

What is shown at 

Estimate based on your NI record up to 5 April 2023?

Albermarle

I did give him a nudge a while back about joining the company pension scheme but no joy - next time I am talking to him I while try and sell it a bit more

He should forget about adding to this old SL pension or opening a SIPP, and join his employer scheme pronto.

Even with a basic auto enrolment scheme, you effectively get 8% of your salary added to the pension at a cost to you of 4%

Nimb

xylophone said:

Perhaps if you explained that in effect he is accepting a cut in salary, because he is turning down an employer contribution to his retirement provision.

Does his state pension forecast show that he is entitled to at least a full new state pension?

What is shown at 

Estimate based on your NI record up to 5 April 2023?

The first thing I did was check his state pension and everything is good on that side of things as he is due £215 and cannot improve his forecast.

Over Christmas I explained the process and benefits of a company pension so he is going to join this in the new year and said he may set up a SIPP as well.

thanks to everyone that replied