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Any IFA's about?
I've got a couple of very small pension pots - £2.5k in one, about £15k in another - from old employments. Is there any reason NOT to transfer those out and combine them into one of the larger personal pensions I've got?
I'm mainly thinking about just reducing admin (having just changed address with 5 companies). I can see that having >1 pot might make sense from a risk point of view but these don't seem to make any sense. As soon as I start asking to do it the phone drones all start 'you should see an FA'
[i] As soon as I start asking to do it the phone drones all start 'you should see an FA' [/i]
Because after the previous fiasco's they have to...
FWIW I've found it next to impossible to transfer a pension over in the last 12 months - and this is one where I worked less than 2 years so would only get a cheque (less tax etc) of my contributions, and am trying to transfer it directly into an existing private pension.
I amalgamated 4 pensions into one pot a couple of years ago. I paid an IFA about £500 to do this.
To be fair the gains my "new" pension has made compared to the old ones have far outstripped the £500 cost although I'm aware that investments can go down as well as up.
I'm not sure it would be worth it for small amounts as from memory it was a flat fee rather than a percentage.
The DIY option should be possible though?
I'm in circle of phone hell where numerous companies have merged, different phone numbers for different policy numbers, dead numbers on websites, fax numbers given to me to call (which was meant to be 'new business' which wouldn't be right anyway).
which is kind of why I want to merge it all - having spent some time trying to help my mother with her finances over Christmas where she has at least 15 different ISA pots with tiny amounts of money in, many receiving less than base rate interest, and all generating paperwork.
You should be able to do it without any fees. Contact the pension company you want to stay with and take it from there, they should be able to help you. The only reason not to is if there are any guaranteed benefits associated with one of your funds.
I mopped up some small ones in a SIPP, no IFA needed, just opened a SIPP and filled in transfer forms. Took about 2 weeks.
Wot footflaps and gonefishin said. One live fund incurs much lower fees than several dormant ones.
I did 4 into 1 a couple of years back, the recipient fund co-ordinated it all. Just make sure you fill, sign and send back forms when you have to by return and it all just happens.
With hindsight I should have put the three I was transferring into a SIPP instead of my employer scheme - not a mistake as such (doing nothing would have been the mistake!), but something that I later rectified
Don't bother with IFAs, they add nothing except cost.
As with mike_p, I have recently consolidated my pension pots (from various jobs) into my current provider. I rang my current provider and they sent me the form I needed to fill in. All the information for the old pension (number, ref, etc) was on a previous annual statement.
Will be a bit of signing and scanning, but certainly save you on the IFA fees (not all IFAs are bad, but I've had a fair bit of dealings with them, including the large networks and most of them, 80%+, are complete chancers).
Every person I've spoken to on the phone today has told me something different. Unbelievable - one helpdesk operative told me it's a 'push' process (ie I tell the provider I want to leave) then the next tells me it's Pull (ie the provider I want to transfer to tells the existing holder.
It's a pull process, fill in a form with new provider and they request the money from the existing company.
Just open a SIPP and get them to do the work to put your pensions into one place
http://www.moneyobserver.com/our-analysis/cheapest-brokers-isa-and-sipp-accounts
So what's the benefit of a SIPP - I've never looked into them. For a long while my pensions have been linked to my employer - some final salary and 'AVCs'. The AVC provider was cheap and the employer threw some in as well so made sense.
SIPPS don't offer that much advantage over any other form of pension. The range of available funds might well be greater but unless you know how to use that information then it's of little value. A company scheme may have lower fees and if they contribute too then it becomes a no brainier.
May have been mentioned Remember pension plans have different administration costs. So closing a cheaper to run pension plan and merging to another plan with higher administration costs would not be best practice / advice
A SIPP is just a personal pension instead of a company scheme. If you have a company pension, contact them, and transfer in your old ones. If not, pick a SIPP you like, and get them to transfer it all in.
In a recent past life I was a pension specialist (still do something very similar but not just pensions ).
A SIPP is not just a non-company individual pension. A SIPP is a specialist type of pension that allows investment in many different types of assets other than just investment funds. Otherwise it is just a personal pension (or a PP). SIPPs that are really just PPs tend to be more expensive than bog standard PPs (with some notable exceptions, e,g. Hargreaves lansdown) although that may be hard to determine due to a myriad of charges applying to SIPPs rather than the one charge (annual management charge) that often applies to PPs.
Rules
- if a transfer comes from a company scheme, many PP providers will insist on you getting advice before they will accept it, especially if it's from a Defined Benefit/ final salary scheme.
- if it's just from another PP, many companies will simply allow you to transfer it over on a non-advised basis. Call the ceding scheme and ask for a transfer pack (you'll need some of the details in this to fill in the new PP form), then call the main PP provider (probably where you have your biggest current pot but be aware that there are probably cheaper options out there if you've had this for a while) and tell them you want to transfer some money in and ask for a form to do so.
Most advisers will charge around £500-1000 for a straightforward transfer. Don't be afraid to negotiate, they're used to it but will have a cost that they won't go below. Best to go with IFA rather than restricted (and definitely do not go to a bank adviser) as this allows you to get full choice of the market.
Thanks for the advice everyone. I'm going to try to just get the two small balances into one of the former company linked money purchase schemes (which have nice low charges) and then think about doing something more interesting when I'm earning again.
I think I've called each of the 4 providers twice now and the only one managed to give the correct information first time.