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Freetrade - incentive to switch or not?
chrispattinson
Posts: 7 Forumite
Hi all, I need to check my logic here. I'm 43.
There's an offer on with Freetrade, and the part I will benefit from is: £300k+ pension transfer in gets me £1800.
This will be a few pensions, all of which incurring % based fees .... idea is to go £9.99/mnth Freetrade with a couple of Index funds.
My quesion, however, is around my L&G workplace pension element. Value £140k. partial transfer out, leaving £500 in to build up again (salary sacrifice).
Fee currently £12 per month, I've moved it into Global Index rather than default fund.
I wanted to take it over to Freetrade, to save on the monthly fee.
However, as part of the transfer, L&G have advised me this has "protected retirement age" at 55, and I would lose this if transferred out.
By my calculations, the benefit I would lose from the protect retirement age, would be around my personal allowance £12500 * 20% * 3 yr.
The benefit I would lose from Freetrade would be £600 bonus + lets say £1800 (15yrs of the £10 per month) fee, with compound interest on this at 5%, lets call it £5k.
So it makes sense to retain the L&G pension.
Am I missing anything?
.... I have also asked L&G, to see if the protect retirement age continues to be applied to future pension contributions (whether I transfer out or not), so I could potentially get the FreeTrade incentive, and then build up the L&G pot again to a value where I can get enough in to take advantage of the 55 to 57 time frame.
There's an offer on with Freetrade, and the part I will benefit from is: £300k+ pension transfer in gets me £1800.
This will be a few pensions, all of which incurring % based fees .... idea is to go £9.99/mnth Freetrade with a couple of Index funds.
My quesion, however, is around my L&G workplace pension element. Value £140k. partial transfer out, leaving £500 in to build up again (salary sacrifice).
Fee currently £12 per month, I've moved it into Global Index rather than default fund.
I wanted to take it over to Freetrade, to save on the monthly fee.
However, as part of the transfer, L&G have advised me this has "protected retirement age" at 55, and I would lose this if transferred out.
By my calculations, the benefit I would lose from the protect retirement age, would be around my personal allowance £12500 * 20% * 3 yr.
The benefit I would lose from Freetrade would be £600 bonus + lets say £1800 (15yrs of the £10 per month) fee, with compound interest on this at 5%, lets call it £5k.
So it makes sense to retain the L&G pension.
Am I missing anything?
.... I have also asked L&G, to see if the protect retirement age continues to be applied to future pension contributions (whether I transfer out or not), so I could potentially get the FreeTrade incentive, and then build up the L&G pot again to a value where I can get enough in to take advantage of the 55 to 57 time frame.
0
Comments
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I wonder if the LG protection would also apply to transfers in from funds without the same protection?!I think....0
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