Transfer Pension

Hi there,

I am looking for some advise, i have recently joined my companys pension scheme. I have a pension from my previous employment which i was only in for 11 months. My question is is it worth my while to trasfer this pension to my new pension or is it better to cash it in?

naidster said:

My question is is it worth my while to trasfer this pension to my new pension

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It's not always necessarily a good thing to consolidate pensions into one place. Some people like to do this for ease of administration. However you need to check what the charges are on the old and new scheme for example. If you would save on charges by transferring in then it might be a good idea. Some people like to spread their pension savings over several providers which might be an argument not to consolidate. Different pensions may offer different funds which might also be a factor for or against consolidating.

or is it better to cash it in?

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Unless you really, really need the money it would be better not to do this. You will only get back your own personal and AVC contributions (not any employer contributions) and tax of 23% (?) will be deducted.

You could also consider transferring the old pension into a buy out bond (a personally owned standalone pension policy) if you could get a better deal on charges, fund selection etc. by doing so.

Bear in mind that a paid-up occupational pension fund may continue to levy a small monthly policy fee even when you are not contributing to it. This will be done through encashment of units to meet the charges. This can be avoided by transferring to a buy out bond. A relatively minor issue but another one to bear in mind.

I may not have covered every relevant issue above but it's a start. If in doubt get independent, professional advice.