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Three pension schemes should I combine?

by marzipanvibe 03 August 2012 |

4 comments | Love

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Hello

I am (I'm ashamed to say) not very educated regarding pensions. At the moment I have three small schemes, a private pension with Prudential, an old stakeholder pension with standard life for somewhere I worked a couple of years, and a current stakeholder pension which I am not contributing to but Company contributing 5%. I am contributing a very small amount to the Prudential pension on a monthly basis. What do I need to consider before looking at transferring into my current scheme please? By the way I am not looking to increase my contributions at the moment as I am getting rid of some debt (the end is in sight). Thank you.

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878

MikeGG1 posted
There are 3 basic questions.

One is what are the respective charges?

The second is whether there is a bid/offer spread on the units?

Thirdly, what is the choice of funds?

Mike
Posted on 03 August 2012 | Love 0 loves Report
24

AlanThomas posted
I would leave the schemes as they are, you would incure charges, and who is to say that your current scheme would perform any better
Posted on 06 August 2012 | Love 0 loves Report
21

The Democrat posted
Hi there.

These days it is possible to move most pensions around, the probelm conerns the cost.
To compare like for like, you will need a quote from the existing company as to what pension they will pay, when and on what terms. You will then need to request a transfer value and establish what it will raise on the open market and then what the transfer in will give you in your existing scheme. As a general rule, pension companies prefer larger amounts so if your combined pension assets are less than 10K, I doubt if you'll have much interest. If the sums are substantially more and you're not transferring in, I would recommend you go to a Financial Adviser, as annuity companies will charge commision whether you use an IFA or not. Good Luck!
Posted on 06 August 2012 | Love 1 love Report
878

MikeGG1 posted
The Democrat appears to be talking about Defined benefit schemes rather than Defined Contribution schemes which the question was about.

There is no point at this stage considering how much pension it will buy because generally it is better to transfer on retirement.

You just need to consider the charges that are levied and whether there is a bid/offer spread to overcome.

If there are flat rate charges involved it is often better to combine small pots to eliminate some charges.

It is also possible that some of the charges are paid by your current employer.

However, charges aren't everything. If the choice of funds is very limited, it might be better not to transfer.

Mike
Posted on 06 August 2012 | Love 0 loves Report

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