Old Pensions - Consolidation???

kiwichick · 5 August 2006 at 10:26PM

Hi All,

I am completely useless when it comes to pensions. I dont understand any of the terms but what I do know is that THEY ARE DAMNED IMPORTANT.

I have one company pension, which is worth next to nothing as I only worked for said company for 18 months and my huband has 2, 1 from a company he worked for for 7 years and another he was at for 8 years. We no longer pay into these, are we meant to move them from one company to another when we change jobs?? It is so easy to overlook them and I want to make sure we know we have them when the time comes to retire. Are we able to transfer the funds into some sort of personal pension??

Also, my husband has been married previously, he was married to his first wife while he was paying into his first company pension. Is his ex wife entitled to any of the money either now or in the future?? Is he entitled to any of hers????

Any help HUGELY appreciated,
Al.

EdInvestor · 5 August 2006 at 11:32PM

What kind of company pensions are they? Final salary or money purchase? The former should usually be left alone.The latter can be moved, but it may not be necessary to do so.

Saving in pensions (if there is no company contribution) is not ideal for basic rate taxpayers, use your equity ISAs instead.

State pensions are also important, get a forecast of yours here

Pensions are now regarded as part of the family assets.When he and his wife divorced was there a financial settlement?Did it include the pensions? Often a wife will take the family home leaving the pensions to the husband. If there has been no financial settlement matters can be reopened at a later date AFAIK.

A divorced wife can get a state pension based on her ex-husband's NI contributions ( but this doesn't affect his pension).After 2010 IIRC, this will be reciprocal.

kiwichick · 6 August 2006 at 9:17AM

EEEEKKKKK I didnt know there were different types of company pensions. I'll dig out the paperwork today and try to find out what kind they are. If it doesnt say am I able to write to them and ask (with hubbies signature of course)?

How will I know if it is best to move them or leave them alone? Will we loose any money by moving them?

Is there an easy way of keeping track of what they are worth? We no longer get statements from either company, should we write and ask for them??

There was no financial settlement when he and his first wife seperated. He bought her out of the family home (and went broke because of it) and we pay a privately arranged amount of child support (no CSA involved) but thats as far as it goes.

Thanks for your advice.
Allison.

EdInvestor · 6 August 2006 at 10:33AM

kiwichick wrote:

EEEEKKKKK I didnt know there were different types of company pensions. I'll dig out the paperwork today and try to find out what kind they are. If it doesnt say am I able to write to them and ask (with hubbies signature of course)?

Yes but it's easy to tell ( doesn't your husband know?). The final salary one will talk about 60/80s (of salary) or some such, as a pension figure, while the money purchase one is actual money invested in actual funds usually run by a named life insurance or fund management company. There's also a third type called a "Group personal pension", this is also at an insurance company.

How will I know if it is best to move them or leave them alone? Will we loose any money by moving them?

The only reason you would usually move a f/s pension is if you thought the company providing it was about to go bankrupt.If it isn't, you would usually lose money by moving and it's not advised. With a money purchase scheme you wouldn't normally lose money by moving but it does depend on what the fund is invested in.It is sometimes better to lose a bit now via an exit penalty so as to leave a moribund fund and move to a much better one which will soon make up the loss.But this may not apply to you. More details are needed.

Is there an easy way of keeping track of what they are worth? We no longer get statements from either company, should we write and ask for them??

Yes, you can ask. If they are f/s pensions, there is no change ( other than for inflation), that's why they don't update.

There was no financial settlement when he and his first wife seperated. He bought her out of the family home (and went broke because of it) and we pay a privately arranged amount of child support (no CSA involved) but thats as far as it goes.

In that case either one of them can go back to court and reopen matters at any time AFAIK.

dunstonh · 6 August 2006 at 12:38PM

There are about 15 types of pension schemes and each one can have variations which make it hard to give generalisations.

How will I know if it is best to move them or leave them alone?

By analysing the existing pensions and comparing them to the alternatives available. Your choice is to do this yourself or get an IFA to do it for you.

Whilst DIY would be cheaper, if you don't know what you are doing it could cost your tens of thousands of pounds if you get it wrong. Another way of looking at it is that you pay a garage to service your car. You could do it yourself free but have you got the skills, knowledge or tools to do it.

Old Pensions - Consolidation???

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