Combining pension pots.

dunstonh

Bod_1234 said:

So the private pension is on a net pay arrangement, there is nothing added to what I pay in. I am the only employee in my limited company,  and I take the tax relief in my company on those pension contributions, which lowers my company earnings, rather than having it uplifted by 20% at the other end.  I think this is quite a normal way to do things, and essentially a swings and roundabouts situation, where there is a tax saving in my company or an uplift in what I pay in, as I determine what I pay in, the 2 systems are essentially the same for me, except in management of it, and where the tax is charged.

it is normal for shareholding directors to use company contributions instead of individual contributions as its is more tax efficient that way.

Now I'm really confused, as every source online says there are only 2 types, "net pay" and "at source", and you are saying mine is now some 3rd option called RAS.  

I wouldn't worry yourself too much about the different way workplace pensions can use to handle employee contributions.      In your case, company contributions are the best way.

I did visit an pension advisor, but all they were interested in was selling me a different pension. :-(

To be honest, unless there are any safeguarded benefits, I would do the same as alternative options exist which are lower cost than both of yours without the restrictions you will have on the SW plans.  Plus, group schemes or auto enrolment schemes rarely except company contributions from any other company than the employer they were linked to.

I understand I can change the risk profile of the entire pension pot.  However what I have currently, I can set a lower risk profile for the large pot, and higher risk profile for the smaller pot.  I would lose that if I combined.

You wouldn't lose it.   A whole of market platform can invest however you look.     Having pension A at higher risk and pension B at lower risk means your total will average out to a different risk level.  So, why don't you just use investments that average it out?

e.g. two pension plans of £50k each.  One is 100% equities.  One is 100% bonds.   Result is you have 50% equities overall.

DRS1

I hope you have more than £35 in the small pension.

You don't have to invest your pension 100% in one thing so merging the two would not stop you having some of the merged pension pot invested in something safe and the rest invested in something racier.

Bod_1234

DRS1 said:

I hope you have more than £35 in the small pension.

You don't have to invest your pension 100% in one thing so merging the two would not stop you having some of the merged pension pot invested in something safe and the rest invested in something racier.

Yes, there was a K missing :-:smile:

I really don't have the inclination to change the internals on my pension, just move the risk slider, so for me, keeping them separate and just adjusting the risk profile of each pot is easier, as I'm leaving the actual translation of what those risk profiles mean to the people I paying to do that job.

Dazed_and_C0nfused

Bod_1234 said:

Now I'm really confused, as every source online says there are only 2 types, "net pay" and "at source", and you are saying mine is now some 3rd option called RAS.  Even Scottish Widows when I set it up on the phone called it a net pay arrangement...

Pensions are really hard work. And this sort of stuff makes it even worse..

You are making a fundamental mistake of mixing up employer contributions, where there is never any tax relief available to the employee.

And employee contributions, which would be paid using net pay or relief at source methods.