Pension question

[DennisNedry]

Hi guys,

 

Long story short I have a tiny pension (about £200 total) from a short period I was auto-enrolled at my previous employer. 

 

Is there any way I can release that money, or do I have to wait 35 years or so to get a £20 per year income from it?

 

I have a much better pension at my current employer so will never want to contribute to the old one.

 

Any advice welcome especially if there's any financial advisers on here.

 

Cheers.

[Bellend Sebastian]

1 hour ago, DennisNedry said:

Hi guys,

 

Long story short I have a tiny pension (about £200 total) from a short period I was auto-enrolled at my previous employer. 

 

Is there any way I can release that money, or do I have to wait 35 years or so to get a £20 per year income from it?

 

I have a much better pension at my current employer so will never want to contribute to the old one.

 

Any advice welcome especially if there's any financial advisers on here.

 

Cheers.

I'm pretty sure you won't be eligible for a refund - it depends on the type of scheme, but I think the only ones you can ever do it with (and only then in certain circumstances).

 

If I were you, switch it into the most aggressive investment option available, forget about it and cross your fingers that it's grown into something worth having. Things will probably change between now and then, but under the current rules you can just take the money out when you're old enough, and although you'll potentially be taxed on it you don't have to buy the little pension you're thinking of.

 

You could get a PlayStation 17 or something

[Bellend Sebastian]

Or transfer it into your current scheme, of course

[Otis]

1 hour ago, Bellend Sebastian said:

Or transfer it into your current scheme, of course

I wave a similar small pension and was told the fee would eat up a large chunk so wasn't worth it.

[bovril]

5 minutes ago, Otis said:

I wave a similar small pension

No sniggering at the back. 

[Bellend Sebastian]

35 minutes ago, Otis said:

I wave a similar small pension and was told the fee would eat up a large chunk so wasn't worth it.

It all depends on how it's set up. If your scheme allows you to do transfers in without being advised, and it's a modern one there's not really any work involved to pay for

[DennisNedry]

15 hours ago, Bellend Sebastian said:

I'm pretty sure you won't be eligible for a refund - it depends on the type of scheme, but I think the only ones you can ever do it with (and only then in certain circumstances).

 

If I were you, switch it into the most aggressive investment option available, forget about it and cross your fingers that it's grown into something worth having. Things will probably change between now and then, but under the current rules you can just take the money out when you're old enough, and although you'll potentially be taxed on it you don't have to buy the little pension you're thinking of.

 

You could get a PlayStation 17 or something

 

15 hours ago, Bellend Sebastian said:

Or transfer it into your current scheme, of course

 

I did enquire about transferring it into my current scheme but I'm in the Local Government Scheme now and they don't accept private sector transfers in.

 

For now I've set it to aggressive investment and hope it grows above inflation over my working life. 

 

It's a shame that you can't cash in pensions as small as this one, mind. I'd happily pay 20% on the total to take it now now and just have it closed.

 

Cheers for the advice.

[jonthefox]

17 hours ago, DennisNedry said:

Hi guys,

 

Long story short I have a tiny pension (about £200 total) from a short period I was auto-enrolled at my previous employer. 

 

Is there any way I can release that money, or do I have to wait 35 years or so to get a £20 per year income from it?

 

I have a much better pension at my current employer so will never want to contribute to the old one.

 

Any advice welcome especially if there's any financial advisers on here.

 

Cheers.

If it’s the NEST pension then take it to your new employer. After all it’s free money.

[Bellend Sebastian]

58 minutes ago, DennisNedry said:

 

 

I did enquire about transferring it into my current scheme but I'm in the Local Government Scheme now and they don't accept private sector transfers in.

 

For now I've set it to aggressive investment and hope it grows above inflation over my working life. 

 

It's a shame that you can't cash in pensions as small as this one, mind. I'd happily pay 20% on the total to take it now now and just have it closed.

 

Cheers for the advice.

No worries, and it wasn't that good was it?

 

You may not be able to transfer in (or out, for that matter), but it's a final salary scheme that most of us on here will be well jealous of.

 

I wouldn't be too sad about your little pension. You're bound to be a member of a scheme at some stage that you can transfer into; even if you stay with the council the scheme will probably change at some point as I doubt ones of that type will be around forever. They're a bit of a novelty even now

[Izzy]

1 hour ago, Bellend Sebastian said:

No worries, and it wasn't that good was it?

 

You may not be able to transfer in (or out, for that matter), but it's a final salary scheme that most of us on here will be well jealous of.

 

I wouldn't be too sad about your little pension. You're bound to be a member of a scheme at some stage that you can transfer into; even if you stay with the council the scheme will probably change at some point as I doubt ones of that type will be around forever. They're a bit of a novelty even now

I eventually transferred my DB final salary scheme after asking loads of questions on here a few months ago (thanks again btw for your expertise mate).

 

It was a fascinating (and expensive) process and I was encouraged how much due diligence and process the FA went through. They're clearly under big regulation and scrutiny to make sure the decision is right for the individual and they went through the pro's and con's in great detail with me.

 

In the end, it was thought best I transfer my final salary pension into a SIPP. The main reasons were that my wife/kids get 100% of it if/when I die, vs only 50% of my final salary scheme. I also like the flexibility of a SIPP and for someone like me who expects to have a shorter life expectancy, it was the right thing to do.

 

In saying that, for most people probably, I can see the benefit of leaving a final salary DB scheme where it is and leaving it well alone. If you're in good health and expect to live to a ripe old age then it's a great benefit to have.

 

The FA took a nice big % but he earn't his money tbf. Pensions really are a minefield and I can't stress enough how vital it is to get some trusted and expert advice.

 

 

[DANGEROUS TIGER]

2 hours ago, DennisNedry said:

 

 

I did enquire about transferring it into my current scheme but I'm in the Local Government Scheme now and they don't accept private sector transfers in.

 

For now I've set it to aggressive investment and hope it grows above inflation over my working life. 

 

It's a shame that you can't cash in pensions as small as this one, mind. I'd happily pay 20% on the total to take it now now and just have it closed.

 

Cheers for the advice.

I am on an LGS pension now I have retired. I worked in a factory for nineteen years, before joining the police, butt I switched my pension without any trouble. Things must have changed

[Bellend Sebastian]

26 minutes ago, Izzy Muzzett said:

I eventually transferred my DB final salary scheme after asking loads of questions on here a few months ago (thanks again btw for your expertise mate).

 

It was a fascinating (and expensive) process and I was encouraged how much due diligence and process the FA went through. They're clearly under big regulation and scrutiny to make sure the decision is right for the individual and they went through the pro's and con's in great detail with me.

 

In the end, it was thought best I transfer my final salary pension into a SIPP. The main reasons were that my wife/kids get 100% of it if/when I die, vs only 50% of my final salary scheme. I also like the flexibility of a SIPP and for someone like me who expects to have a shorter life expectancy, it was the right thing to do.

 

In saying that, for most people probably, I can see the benefit of leaving a final salary DB scheme where it is and leaving it well alone. If you're in good health and expect to live to a ripe old age then it's a great benefit to have.

 

The FA took a nice big % but he earn't his money tbf. Pensions really are a minefield and I can't stress enough how vital it is to get some trusted and expert advice.

 

 

You're very kind, given that all I did was try to point you in the right direction. 

 

You sound like you had a good experience, and importantly, were given advice that you understand and can see the value of.

 

The advice is quite expensive - partly because not all advisers are qualified to do it, and special permissions are required from the regulator to do transfers of 'safeguarded' benefits, and partly because the potential liabilities for the advice firm are massive

[DennisNedry]

5 hours ago, Bellend Sebastian said:

No worries, and it wasn't that good was it?

 

You may not be able to transfer in (or out, for that matter), but it's a final salary scheme that most of us on here will be well jealous of.

 

I wouldn't be too sad about your little pension. You're bound to be a member of a scheme at some stage that you can transfer into; even if you stay with the council the scheme will probably change at some point as I doubt ones of that type will be around forever. They're a bit of a novelty even now

You weren't able to tell me what I wanted to here, but you don't make the rules

 

I think it's still a generous pension scheme however it was hamstrung in 2008 and did finally change from a final salary pension to career average scheme on 1st April 2014, unfortunately for me as I joined in 2016! If you want to spend an afternoon reading about the LGPS and how it's changed over the years then here it is: https://www.lgpsmember.org/arm/already-member-how.php

 

[The Fox Covert]

I have four pension funds, varying in total fund value from the smallest which would buy a small but new Eurobox hatchback to the largest which would buy a house outright in most of the country 100 miles or more north or west of London.

 

If you ever contemplate transferring a private scheme from one fund to another ask the company how much they are going to charge you for the service and what the annual management charges are on the proposed new scheme. They usually go pretty quiet when you ask that question, once you realise the awful truth that the friendly half hour chat with the salesman could net him a grand in commission and cost you thousands more in transfer costs. The new home for your pension will have to do a great deal better than the old one for you to get your money back. I believe the pensions industry call it churning.