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Pensions - Can you consolidate lots of little pensions?(7 Posts)
Over the years I've always joined occ pension schemes and now I have about 5 of them sitting around. I've now started a new job and will be joining that scheme too. My job is with a tiny organisation and they don't have financial advisors to help so what should I do with all these other pensions? I'm a bit worried they'll just get forgotten/cease to exist etc.
is anyone a financial advisor with any advice - thanks in advance
Yes, you can if the scheme rules allow. It may not be in your best interests to do so though, depending on factors like the sizes of the pots, any guarantees they come with, and whether they are unfunded public sector schemes.
You need proper guidance. Starting point is to get current statements for each scheme and a copy of the scheme rules. You also need to consider what your needs are for an income in retirement, and to what extent those needs are being met, and how you might bridge any shortfall.
Thanks, can I pay someone to advise me on this (or get advice for free anywhere?) Who would I go to - an IFA or someone from the new scheme I'll be joining? I messaged the UK pensions advice dept months ago but noone bothered to reply.
You can receive free guidance from The Pensions Advisory Service or from Citizens Advice. However, they will only tell you what your options are and suggest things to think about.
For proper, regulated pensions advice you will need to consult a financial adviser, preferably one who holds an Occupational Pension Scheme transfer licence if you are looking to transfer your schemes. If any of the pots have a value of more than £30k then it is a legal requirement that you seek advice from such an adviser before moving. The Money Advice Service has a directory of retirement advisers. The Personal Finance Society has a directory of advisers and this can be filtered to find pensions specialists. Both these directories are searched by postcode so you can find someone who is local to you. This type of advice would have to be paid for.
If you are over 50 you could start with a free face to face guidance session at Pension wise (the citizens advice service mentioned above). Then get paid for advice if necessary.
Before you consult anyone, you need to get details of all the pensions, what their pension value is, how much the transfer value is, if there are any special conditions, is there a minimum growth rate? Also, when would you get your pensions from these old schemes? Whilst my current work pension is 65, my older ones are 60, so may allow me to retire earlier.
One of the old pensions had only £25 left in the scheme when I left the job in early 80s, as I had been there less than 2yrs and was repaid majority of my contributions.
The scheme was recently taken over and I was offered about 5.5K as a full pay off. This seemed a lot until I looked into the detail - the annual rate of increase is set around 10%, so the £25 has grown somewhat and will pay me approx £600 a year from age 60, so I only have to live to be 69 to be better off than if I had taken the pay off! I can also defer it if I work past 60, and will get a higher annual pension when I do take it. Whilst £600 is not much in the scheme of things, it is more than I expected, considering how little I paid into it.
DH has also looked at transferring a pension into his SIPP. It is above the level where he needs financial advise, but also has some guaranteed rates attached, so I think he has come to the conclusion to leave it as it is.
It is a difficult area, esp if your previous pensions are final salary, as there are some v good old schemes out there, which you are unlikely to better by moving the money. What is the new scheme, I am guessing it is a money purchase (also known as defined contribution).
So, to echo a pp, before seeking advise, spend some time finding out all the details of your existing schemes, you may realise, as I have done, that the existing schemes are best left well alone.
the transfer value may be very poor.
I had a private pension worth about £30k. I asked about transferring it to buy extra time in my workplace pension (2/3 of last salary scheme one). One yr of contributions normally to the last salary scheme would cost me about £1200.
The private pension would buy 18 months... £30k payment for what would normally be an £1800 purchase (and would also pay back out about £1800 a year eventually). Needless to say, I didn't proceed! Now it looks like I might be able to access all the £30k upon retirement, or better yet to draw it down at an annual rate of my choosing.
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