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I'll try to keep this short 😕
I had a money purchase pension in a job I worked in 6 years ago. I have no idea what it is made up of but suspect stocks & shares and some property. I have not paid into it since I left the job and after the inevitable ups and downs it now has £4.5k in it. Not huge but enough to consider what I do with it. Held with Aviva.
After a spell in a final salary pension (now closed and sitting there until I am 70 something) I now have another money purchase pension with Blackrock. I and employer are paying into this at a good rate.
So in a fit of financial management should I transfer the £4.5k of original pension into the new one (I have checked and can do this). It seems to make sense to me from a simplicity point of view.
I was just going to do it but when I rang both pensions asked if I had taken financial advice. I suppose this is something they are told to say but it got me thinking as I guess there is no way to split it once I have merged it!
Any thoughts; qualified or not!
hookers
coke
asked if I had taken financial advice
Roughly translated this means "if you make the wrong decision can you please make sure there's someone else to blame, not us". IANA IFA but it's usually worth looking to see what fees are involved in transferring it, it may not be worth it.
hookerscoke
Can't do that until you're 55 (or is it 50 now?) when you can take out a lump sum.
They're right to check whether you've sought advice (may even be a regulatory requirement). Though simpler, you would be putting all your eggs in one basket - these places do go bust occasionally, eg Equitable Life. There may also be admin charges to weigh up against potential savings if you were to amalgamate.
Definitely worth finding a good financial adviser. They can be useful to have tucked away for when you need one unexpectedly anyway. Ask around locally for specific recommendations (colleagues, family etc). The good ones should be happy to offer advice for free now in the interests of building a relationship for later, especially if introduced by an existing client.
Hope this helps.
I wouldn't bother with an IFA for such a small amount - most of it will probably disappear in their charges. Why not transfer it to a SIPP and manage it yourself - it doesn't matter that you don't know anything about managing money nor do the so called professionals! It's much more fun and the best way to learn is by having a go yourself.
A good pension IFA will charge around £450 for this advice. Keep it simple. What are the fees for each fund?
Aviva fees are not low, and could be eroding the fund all the time. You might be better transferring if the fees are lower, and there is no penalty to move.
You need to check; carefully.
I thought that most pension 'products' were only available through an IFA? I'd be genuinely interested to hear if that's not the case.
If it were me, for such a small amount, I’d transfer into your current pension, so it's not forgotten about in 20 years time.
Good luck with finding a decent IFA 😀
I thought that most pension 'products' were only available through an IFA? I'd be genuinely interested to hear if that's not the case.
That's what IFAs want you to believe - you can set up a SIPP with plenty of providers - Hargreaves Lansdown, Fidelity plus plenty of others
http://www.moneysavingexpert.com/savings/cheap-sipps#best
The fees as highlighted above both leaving with Aviva and transferring are important so look into it.
If you decide it is not material then consider keeping them separate. You would be able to take them at different ages say 60 and 65. If you transfer you will have to take pension all at one time. More flexibility -v- more to manage. Second reason is as also pointed out above having all your eggs in one basket is not always good.
A good pension IFA will charge around £450 for this advice.
😯
That's not what I'd call a good IFA.
Thanks for this advice. A good point about the ongoing fees on the Aviva pension. I had not thought of that. It adds to the benefits of combining as I would then only pay one set and possibly at a lower rate.
Also a good point about any fees in connection to moving the monies around.
Think I will find out the answers to both of these before I consider whether I need an IFA.
Any one for spam
look up SIPP, understand what a SIPP is, if you decide to go for it (*you MUST be prepared to look after it on an annual review basis minimum) then lookup 'Hargreaves and Lansdown' (*other SIPP providers are available)
edit - IFA get paid commission on investment amount or for advice, try asking the following 'if your investment does less than market average what penalities do you incur ?"
Purely from an 'eggs' and 'basket' perspective, I'd leave it separate.
I've about 10 diff. pensions, and based on some of the returns, better for it...
In Saturday's Daily Telegraph their supplement 'Your Money' contains an article on just this subject. Might give you some ideas if you can obtain a copy.