Nest pension transfer in to avoid 1.8%

olb81

Talking to AI suggested that I can avoid the 1.8% fee for a lump sum deposit into nest.

It suggests I can open for example, a vanguard SIPP , deposit here, wait for the tax relief to be added, then transfer to nest from there.

Then I can close the SIPP, therefore avoiding a 1.8% Charge. Has anyone done this before?

Marcon

Doesn't matter if anyone else has done it - it's viable if you are sure you'd prefer NEST to some other sort of personal pension.

QrizB

Yes, that's how pension transfers into Nest work.

You might not want to close the personal pension; you could keep it open for future contributions. Depending on which personal pension you choose, you might not even want to transfer into Nest but rather leave your investment there.

olb81

well its just that i currently have my only pot in nest and my current employer is paying into this along with my wages

dunstonh

Talking to AI suggested that I can avoid the 1.8% fee for a lump sum deposit into nest.

Why would you want to put it in NEST in the first place?

Then I can close the SIPP, therefore avoiding a 1.8% Charge. Has anyone done this before?

If they had, it would be an unusual transaction. It is the type of transaction that someone lacking expertise would recommend. It will avoid the initial fee, but the reason for choosing Nest is unclear.

well its just that i currently have my only pot in nest and my current employer is paying into this along with my wages

It is common for people to keep an individual plan open alongside a workplace pension scheme. If they change employer, they transfer the existing plan to their individual scheme and start the new employer scheme.

olb81

I am so very silly that the word SIPP puts me off setting one up, it sounds strange although i know its just an abbreviation of four other words

QrizB

OP you work for Royal Mail?

Look at page 7 of this document from the CWU (your union):

https://education.cwu.org/wp-content/uploads/2025/01/Booklet-1.-Understanding-your-Royal-Mail-Pensions_15Jan2025.pdf

Nest is only for your first year of service. After that you'll be enrolled in the RMCPP collective DC plan.

I also need to ask - you've said in another thread that you've got £50k in your pension. If Nest is your only pension, and you've only been in that for less than a year with Royal Mail, how do you have £50k already?

olb81

i transfered another pension from standard life into nest

also the Royal mail allows you to opt out of the collective scheme and stay with nest

JoeCrystal

https://forums.moneysavingexpert.com/discussion/comment/82147584#Comment_82147584

What? WHAT? Are I am right in thinking that they paid much higher employer contribution than they do into NEST and that they also pay Ill-Health Premium as well for collective one as well. So by sticking with NEST, you pretty much gave yourself a paycut

EDIT: I did some quick googling: RM pay 4% into NEST while RM pays in 13.3% of your pensionable pay (plus, RM will pay a further 0.3% of your pensionable pay towards your ill health premiums) As well getting a lump sum also builds up as a proportion of your pensionable pay at a rate of 3/80ths of any pensionable pay earned while paying into the Collective Plan.

No such luxury with NEST!

dunstonh

https://forums.moneysavingexpert.com/discussion/comment/82147566#Comment_82147566

Nest is a Master Trust scheme. SIPP is a Self invested Personal Pension. I would have thought that Master Trust scheme would be the stranger sounding one.

olb81

https://forums.moneysavingexpert.com/discussion/comment/82147629#Comment_82147629

I prefer the "pot" system though where my contributions arent mixed with everyone else. i can easily log in and see my pot balance. i have no idea how that would work with the collective scheme. also i dont plan to work there all that much longer, if i can find work elsewhere