Bugger, my old employer's pension scheme is being wound up - who do I see for independent advice on options?

[mrmellors]

Scheme is being wound up - money purchase. I've been given the option of transfer to a new private scheme of my choice (and ooh thanks - less than a month to choose and inform trustees of choice) or transfer to new (external) scheme by default.

I've got quite a fund tied up in it, I paid in pretty large avcs while I was there.

Would like to see independent FA, but how do I know I'm going to see someone who actually knows about pensions?

Read the small print and check the following points:

Although it says you have less than a month to decide whether it is transferred to the new scheme or somewhere else, you may be able to transfer it out of the new scheme to somewhere else at a later date without penalty.

What are the administration costs on the new scheme? It is not unusual for the company to subsidise these so you get a better deal staying in - as any decent IFA will tell you, it is very difficult to predict which fund manager will have the best gross performance over a given period of time, but there is a strong correlation between net returns and low charges.

Or to put it another way, playing the markets is pretty much a lottery but the less of your money is pissed up the wall on commissions, bonuses and glossy advertising campaigns the more there is left for you when you retire.

Thanks MrAnchovy, the letter itself is contradictory on the deadline for informing them about a transfer - it says "within one month of receipt of the letter", but then "if possible by 2nd February." It does however say that they reserve the right to make you take the default option if you don't respond with details of your own pension scheme.

Management fee for the default scheme is 0.3% oer annum, no idea how that compares - but there is no transfer-in fee - I assume there would be if I went for a private alternative.

What a collosal PITA! But thank you for replying, I know pensions isn't exactly a subject that grabs most people's attention!

You won't get 0.3% on the open market - 0.8%pa is probably the best although you shouldn't have to pay a transfer in fee. Over 15 years that could make 7% difference in your retirement fund.

Thanks MrAnchovy, that puts it in perspective. 7% potential difference is a lot, on top of which I guess I'd have to factor in commissions and what not. I appreciate you taking the time to reply, thanks.