Should I align all my pension schemes?
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I'm in my fifties and have just changed jobs for the fifth time in the thirty plus years I’ve been working. In each job, I have joined the company’s pension scheme so I get statements from all of them each year. There’s not much in some of them but one of them is worth about £150,000. I wonder if I should move them all into my current company scheme. Is this possible – and is it a good idea?
Jeremy Woodruff of Smith & Pinching responds:
The answer to this depends on a range of different factors. In order to help you, I would need to find out all about each of the schemes and about you.
There are lots of things to consider for each scheme, such as how it is invested, its performance, its current value, its transfer value (which is often not its current value), if there are any additional benefits (such as a guaranteed income, spouse’s pension or life cover) and what fees are payable.
Workplace pension schemes vary considerably. Some are more limited in their investment choices and are relatively inflexible, whereas others allow greater choice and your pension investments can be aligned much more closely with your investment risk profile, for example. Older schemes may have valuable additional benefits but may also have a higher fee structure.
It is certainly possible to transfer pension savings from one UK registered scheme to another, but your current workplace pension may not be the ideal place to put your savings. Again, we would need to look at that carefully to see if it is a suitable place to hold your wider portfolio and suggest appropriate alternatives if necessary.
The focus of our analysis would be you and your needs. To ensure that you are getting the most out of your pension savings, it is important for us to understand what you are looking to achieve in retirement and to build a plan accordingly. This means analysing your current and future income, other savings and investments, your family circumstances, and your general expectations for retirement.
I strongly recommend that you take independent advice from a Chartered Financial Planner before moving any of your existing pension benefits.
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Any opinions expressed in this article do not constitute advice. The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.
For more information, please visit www.smith-pinching.co.uk