About Annuities

The majority switch professions numerous times during their working life; nevertheless when you change employers, it is worth considering the pension pot that you have saved. You might like to consider mixing your pensions into one pot. It is better to keep an eye on fund performance if your pensions are all with one provider; additionally, a single pension pot will suffer less forms and administration, and could also generate lower costs and better general performance. Sounds like a no brainer? In principle yes nevertheless , there are some critical issues to think about before taking the plunge.

Most occupational pension schemes and personal schemes can be transferred, but there are restrictions and potential issues. It’s not usually worth transferring final-salary or public-sector pension schemes; the bonuses of these are too good to lose. You should only transfer if you have actually left a company: if your current employer contributes to your existing occupational pension scheme, you should not switch. It’s also worth noting that the money in your pension can only be transferred from one pension scheme to another (until the time you have retired), and not every new pension scheme accepts inward transfers. If your pension pot is tiny, it may not be worthwhile switching: you’ll have to pay charges when you transfer, and some suppliers impose tough penalties if you leave their scheme. And, if you’re really close to retirement, you won’t have satisfactory time to recover the fees suffered by transferring.

Transferring and totaling your pension pots might generate important long term benefits; however , any decision to do so must be taken for the proper reasons. Tread carefully and, above all , take expert advice prior to making an irreversible decision. Your investment adviser is well-placed to help with this.

Naturally, if you are looking to release funds from your pension by way of an early pension lump sum, you must seek skilled advice before doing this. It could be better to total your pensions first, or it may be better to simply take an early pension release instead of aggregation.

Info courtesy of the adviser hub. We must stress that before you take any action in terms of consolidation of pensions or taking an early pension release, it is important that you take professional pension guidance from a certified advisor, undertaking a full pension review.