Consolidate pensions?
Discussion
Hi,
I can't make up my mind it I should transfer my old pension into my current one.
I'm 43, worked for the same company for 20 years. The company I work for closed the first pension, and moved the scheme from eon to fidelity.
I've basically got about 88k in the first pension with aon, and 75k with fedelity who we're currently with.
I'm thinking with how compound interest works, I'd be better off consolidating the them and just carry on paying into my current pension pot until retirement. What do I need to consider when deciding? Am I best speaking to a financial advisor?
I can't make up my mind it I should transfer my old pension into my current one.
I'm 43, worked for the same company for 20 years. The company I work for closed the first pension, and moved the scheme from eon to fidelity.
I've basically got about 88k in the first pension with aon, and 75k with fedelity who we're currently with.
I'm thinking with how compound interest works, I'd be better off consolidating the them and just carry on paying into my current pension pot until retirement. What do I need to consider when deciding? Am I best speaking to a financial advisor?
Lannister902 said:
Hi,
I can't make up my mind it I should transfer my old pension into my current one.
I'm 43, worked for the same company for 20 years. The company I work for closed the first pension, and moved the scheme from eon to fidelity.
I've basically got about 88k in the first pension with aon, and 75k with fedelity who we're currently with.
I'm thinking with how compound interest works, I'd be better off consolidating the them and just carry on paying into my current pension pot until retirement. What do I need to consider when deciding? Am I best speaking to a financial advisor?
Consolidation can make things easier to manage but there are a couple of things to check first: how are the two pensions performing & would you lose any valuable benefits if you moved the first pension. There's no point moving the older one to the newer if the newer is not performing as well: you need to correct that if that is the case. I can't make up my mind it I should transfer my old pension into my current one.
I'm 43, worked for the same company for 20 years. The company I work for closed the first pension, and moved the scheme from eon to fidelity.
I've basically got about 88k in the first pension with aon, and 75k with fedelity who we're currently with.
I'm thinking with how compound interest works, I'd be better off consolidating the them and just carry on paying into my current pension pot until retirement. What do I need to consider when deciding? Am I best speaking to a financial advisor?
The only reason to consolidate is to make it easier to manage or to reduce fees.
Sometimes your older one may be better/ lower fee than your current, then it makes more sense to leave as is.
I actually consolidate all mine and put into a SIPP to get the lowest fees possible. But generally the benefits are marginal/modest vs the effort.
Can you find out what fees you’re paying on both platforms? It’s generally well signposted now.
But (A*interest) + (B*interest) = (A+B)*interest.
Ie if you have two pots otherwise identical in terms of fees, it makes no difference to the growth vs having in one pot!
Sometimes your older one may be better/ lower fee than your current, then it makes more sense to leave as is.
I actually consolidate all mine and put into a SIPP to get the lowest fees possible. But generally the benefits are marginal/modest vs the effort.
Can you find out what fees you’re paying on both platforms? It’s generally well signposted now.
But (A*interest) + (B*interest) = (A+B)*interest.
Ie if you have two pots otherwise identical in terms of fees, it makes no difference to the growth vs having in one pot!
NH-0 said:
Isn't there an advantage to keeping them separate, £85k covered by the FSCS if the company goes belly up?
Which "company" are you referring to? The one he works for, in which case it has no relevance to his funds held by AON or Fidelity.As for compound interest, this is irrelevant to funds administered by AON or Fidelity.
lancslad58 said:
NH-0 said:
Isn't there an advantage to keeping them separate, £85k covered by the FSCS if the company goes belly up?
Which "company" are you referring to? The one he works for, in which case it has no relevance to his funds held by AON or Fidelity.As for compound interest, this is irrelevant to funds administered by AON or Fidelity.
NH-0 said:
The pension company, AON or Fidelity.
Unless it's a SIPP there's no upper limit on pension protection.https://www.fscs.org.uk/what-we-cover/pensions/
Depends on the pension type and specific "safeguarded" benefits.
Happy to be corrected (I don't work in finance) but far as I know if it's "just" a normal DC pension and you're "just" transferring to another DC provider or a SIPP you don't need to take advice.
If you're trying to cash out a DB broadly speaking yes advice and most likely forget it.
Happy to be corrected (I don't work in finance) but far as I know if it's "just" a normal DC pension and you're "just" transferring to another DC provider or a SIPP you don't need to take advice.
If you're trying to cash out a DB broadly speaking yes advice and most likely forget it.
stuthemongoose said:
But (A*interest) + (B*interest) = (A+B)*interest.
Ie if you have two pots otherwise identical in terms of fees, it makes no difference to the growth vs having in one pot!
One possibility is that 75K + 88K gets him on a lower platform fee. But it's not going to make a huge difference.Ie if you have two pots otherwise identical in terms of fees, it makes no difference to the growth vs having in one pot!
For the amounts you mentioned, combining would not be a bad idea but definitely check the points mentioned by others regarding whether you would lose any benefits, compare fees and investment performance too. Moving/consolidating pensions isn't always the optimum solution.
Also curious whether your Fidelity pension platform has the same features and investment range as the standard platform or is limited. If after doing further research/due diligence it makes sense to consolidate/move platform, I would be looking at fees/investment range and both simplicity and functionality. I am generally a fan of Fidelity, AJ Bell and Vanguard as they are established names and platforms/UI are decent (IMO).
Also curious whether your Fidelity pension platform has the same features and investment range as the standard platform or is limited. If after doing further research/due diligence it makes sense to consolidate/move platform, I would be looking at fees/investment range and both simplicity and functionality. I am generally a fan of Fidelity, AJ Bell and Vanguard as they are established names and platforms/UI are decent (IMO).
How much are you currently paying in platform fees? If higher than £156 p.a. you could transfer to II who are currently offering cashback on transfers. https://www.ii.co.uk/special-offers
silentbrown said:
abzmike said:
Isn t there a £30K threshold where you need to pay a financial advisor to do it for you?
Only for defined benefit schemes. IFA fees for that are percentage based and eye-watering.abzmike said:
As I thought as I ve got an ancient DB scheme worth 37K, which has unaccountably dropped in value by 30% over the past 4 years. I d love to get it shifted but will cost.
It's interest rates. DB gives you a defined benefit, not a pot of money. When interest rates were near zero, the amount of ££ needed to provide the pension was significantly more than it is now. So transfer values hav e dropped.Gassing Station | Finance | Top of Page | What's New | My Stuff