Consolidate my pensions

Chucklechops

Hi

I have 2 work pensions with the same company, contributory & non-contributory (closed to further contributions).

The non-contributory pension is worth around £100,000, and will pay a guaranteed amount at retirement age - around £4,700 p.a.

I realise this is valuable, but I can't help thinking it would be better to transfer this pension into my contributory one, as this makes around 8-9% growth per year.

Would it be wise to do this, or leave as is?

Thank you.

dunstonh

I realise this is valuable, but I can't help thinking it would be better to transfer this pension into my contributory one, as this makes around 8-9% growth per year.

Are you sure you realise it is valuable? If you did, you wouldn't be asking about transferring.

What investment makes around 8-9% every year? Or are you relying on a recent growth spurt, expecting it to continue forever?

The non-contributory pension is worth around £100,000, and will pay a guaranteed amount at retirement age - around £4,700 p.a.

When were those figures last updated? CETVs are half what they were nearly 5 years ago. And the £4,700 goes up each year.

Is the £4,700 before or after tax free cash?

Would it be wise to do this, or leave as is?

90% of DB pensions are best left where they are. Why do you think you are in the 1 in 10 that are suitable for transferring?

ladruid

Depends on the fine print and circumstances… I don't think theres enough information to offer advice.

Is your £100000 pension also gaining growth? what % amount?
Is the £4,700 a minimum amount or a set figure?
Retirement age for the pension? How many years to retirement?

Just a few things that pop into mind.

Marcon

With a transfer value of £30K+ and a pension with 'Safeguarded Benefits' regulated advice is mandatory before the ceding scheme could transfer the funds. Expect to pay upwards of £5K for advice.

Albermarle

The non-contributory pension is worth around £100,000, and will pay a guaranteed amount at retirement age - around £4,700 p.a.

This sounds very much like a Defined Benefit/Final Salary pension. So what it is really worth is the £4,700 pa of guaranteed income it is promising ( most likely with an increase each year). There is no pot of £100K, but it is what is on offer for you to leave the scheme and remove its liability to pay you a pension. As this is usually a bad idea and there have been issues in the past you will be required to take very expensive financial advice before any transfer can take place. Also it is highly likely your other pension would not accept the transfer.

Although your other ( presumably DC type ) pension has done well recently, anything could happen to it in future. So having the nearly £5Kpa as guaranteed income is a good backstop, so most likely best left as it is.

 

Brie

https://forums.moneysavingexpert.com/discussion/comment/81979034#Comment_81979034

I was quoted £8k to get transfer advice for a scheme I'm in and know that if I paid that the advice could come back saying "don't transfer" and I'd be out of pocket for the fee. And as others have said it may be hard to find a scheme that would accept the transfer even if it's from related employment.

Yorkie1

At the moment the stakeholder pension(s) have to accept a transfer in, irrespective of the formal advice given.