Transferring Workplace Pension to a SIPP

Greyhound_love

Looking for non finanical advisor opinions ~ 24 YO. I'll be moving into a new job soon and have a 3 month deferral before starting the new employers workplace pension which im okay with. My current workplace pension is currently sitting at 27% gain but due to my age its only around £1.4k. My current plan is to transfer my current soon to be old workplace pension over to a SIPP with moneybox and start to pay a monthly amount into that then also pay into my new workplace pension. 

Does this tlseen like a good idea ? 

Brie

How long have you been at the old workplace?  It's possible there will be a restriction on retaining benefits in the old scheme if you haven't been there long.  Some schemes have a 3 month window after leaving to transfer with the employers contributions or have a refund without the employers contributions.  Obviously what you're planning will give you the first and better of these 2 options.  

But do check on this as it might be that the best option is to transfer into the new employer's scheme - depending on what it is of course.  

Greyhound_love

Brie said:

How long have you been at the old workplace?  It's possible there will be a restriction on retaining benefits in the old scheme if you haven't been there long.  Some schemes have a 3 month window after leaving to transfer with the employers contributions or have a refund without the employers contributions.  Obviously what you're planning will give you the first and better of these 2 options.  

But do check on this as it might be that the best option is to transfer into the new employer's scheme - depending on what it is of course.  

Hi - I've been with the current soon to be old workplace for 2.5 years. Am I likely to be affected significantly? 

Mark_d

I would keep you pension where it is for now and then transfer it in to your new employer's scheme once you're able to join it.

Why do you want a SIPP?  If you want extra savings for retirement, you can get a stocks & shares Lifetime ISA.  If you're already maxxing this out, then you could contribute to a regular stocks & shares ISA for long-term growth.

One you're in your new pension scheme, you should have the option to make additional voluntary contributions (AVCs).  This is what I do to give myself the best chance of a luxury retirement.

Greyhound_love

Mark_d said:

I would keep you pension where it is for now and then transfer it in to your new employer's scheme once you're able to join it.

Why do you want a SIPP?  If you want extra savings for retirement, you can get a stocks & shares Lifetime ISA.  If you're already maxxing this out, then you could contribute to a regular stocks & shares ISA for long-term growth.

One you're in your new pension scheme, you should have the option to make additional voluntary contributions (AVCs).  This is what I do to give myself the best chance of a luxury retirement.

The thinking behind the SIPP was because I wanted to make additional contributions per month as well as my new workplace pension. I have my LISA set up for 1st time house deposit so won't be able to use it for retirement. I do have a stocks and shares ISA which I haven't used yet however I wouldn't get the same tax benefits from contributing to a SIPP than i would just into a ISA. 

Albermarle

The thinking behind the SIPP was because I wanted to make additional contributions per month as well as my new workplace pension.

Probably easier just to make additional contributions to your workplace pension. 
However you may wish to change the investments in the new workplace pension to something more suitable for someone your age.
Suggest you start the job, then when the pension starts after 3 months, post up the details on here for more specific comments.

dunstonh

Looking for non finanical advisor opinions

Not often I am asked not to contribute to a thread.

My current plan is to transfer my current soon to be old workplace pension over to a SIPP with moneybox

Last I looked, moneybox didn't offer a SIPP.

cloud_dog

Greyhound_love said:

Looking for non finanical advisor opinions ~ 24 YO. I'll be moving into a new job soon and have a 3 month deferral before starting the new employers workplace pension which im okay with. My current workplace pension is currently sitting at 27% gain but due to my age its only around £1.4k. My current plan is to transfer my current soon to be old workplace pension over to a SIPP with moneybox and start to pay a monthly amount into that then also pay into my new workplace pension. 

Does this tlseen like a good idea ? 

Does your new employer operate a Salary Sacrifice arrangement?

What are the charges* on your (soon to be) old scheme compared with the charges* on your soon to be new scheme?
* - Not just the vanilla charges displayed on the website but the actual charges applied to your account.  Employers oftentimes obtain discounts on providers basic charges. 

The above question may lend itself to waiting until you have all the information for the new scheme before making decisions.

Are you aware that money purchase / DC pension scheme providers will put new entrants in to their default fund(s), and that may not be the most appropriate fund(s) for you, so it is worth understanding what you are currently invested in, and what you will be invested in with your new employer (by default).

Do you have an understanding of what you would choose to invest in should you wish to, e.g. an investment strategy? (it's ok not to have one).  You could Google Lars Kroijer "Investing Demystified" (Youtube, website, book), or read Tim Hale's book "Smarter Investing", which may help.

Just a comment re Moneybox pension, whilst I appreciate that it is one of the more robo-type offerings, I wouldn't go with them simply because of their charges.  But, see if you can answer some of the above questions and people will be able to help and offer their own opinions on options, etc.

LHW99

Also, depending on the new employer, it could be that if you pay more into the new workplace pension, the new employer will also pay a bit more. Not all do, but its worth checking, as that's more "free" money.

Brie

Greyhound_love said:

Brie said:

How long have you been at the old workplace?  It's possible there will be a restriction on retaining benefits in the old scheme if you haven't been there long.  Some schemes have a 3 month window after leaving to transfer with the employers contributions or have a refund without the employers contributions.  Obviously what you're planning will give you the first and better of these 2 options.  

But do check on this as it might be that the best option is to transfer into the new employer's scheme - depending on what it is of course.  

Hi - I've been with the current soon to be old workplace for 2.5 years. Am I likely to be affected significantly? 

2 years is generally the cut off point for losing the employer contributions but I would always check.

Had a friend who worked for a place for just over a year, always grumbled about how contributing to the the pension was a rip off, waste of money.  When she left she didn't think about this at all as she was busy job searching and then after 2 months got a letter to remind her that she only had a month left to transfer her pension pot elsewhere before there was an automatic refund of her contributions only and she'd have to pay tax on them.  Confirmed to her what a rip off pension schemes were.  15 years later she still thinks the same thing and refuses to join any schemes.  I keep wondering what she'll live on when she hits retirement!!