Tomous wrote:Grumpy David wrote:Tomous wrote:Could anyway advise me what I should be doing about my pensions at previous jobs I worked for 1-2 years? Do I contact my current job pension and ask them to transfer? Or contact the old pension companies (I believe Government has a service that helps you find this)? Or do nothing?
It depends on what the charges are with your previous employer workplace pensions vs what the charges would be if merging them into a SIPP or into your current workplace pension. Some are outrageous like NEST but some can be low enough that it's not worth transferring unless you really dislike the fund or just want it all in 1 place.
I set up a SIPP with Vanguard and transferred my 2 previous pensions into it and also chucked in all of my existing contributions from my current pension too as it had the lowest charges and the most suitable index fund. All my ongoing contributions still go to my workplace pension so I periodically transfer it to my SIPP instead.
The form was quick enough to fill in providing you know who the pension is with and the account number too although the actual transfer of funds can take up to 2 months.
I'm clueless on pensions, I didn't even consider a charge for transferring
I have contributions paid into 4 different employer pensions over different periods, I assumed for ease of use it would be easier to have it all in one place, as I will need to keep updating details of all of them whenever I move etc. Which I haven't done for any of them so my details are out of date for all the old ones
I will look intot he charges and make a decision.
Unless you are really unlucky, there shouldn't be exit charges to incur.
I'm referring to the annual charge that the platform charges and also the fund charge. Some workplace pensions are very cost competitive (although you may not want the particular fund they invest in and may lack options to swap to).
Most pensions just have those 2 costs. NEST are scumbags and charge 1.8% on every contribution so every £100 you put in they take £1.80 right away. You'd hope this would be offset by very, very low ongoing fees but they're not even competitive on that either.
It's naturally easier to consolidate defined contribution pensions and unless you either have defined benefit OR an extremely good pension charge, it's very likely to be worth doing.
Vanguard offer a SIPP which is what I set up in Feb/March. Very easy to transfer funds in as long as you know the old pension provider, the account number and ideally a rough figure of what the pension value is.
I chose them because Vanguard as a platform charges 0.15% and for the actual fund I am invested in:
FTSE Global All Cap Index Fund - Accumulation (100% equities and 0% bonds since I've 40 years till when I imagine I'll drawdown on it) the cost is 0.23% for a total annual cost of 0.38%.
By contrast my Workplace SIPP is the same fund but total cost is 0.68%. Doesn't sound like much but if you use compound interest calculators with 5% annualised returns vs 4.7% annualised returns for 40 years you can see how it impacts in the long run which is why I periodically transfer some of the workplace pension into the SIPP.