Do you have a frozen previous Company Pension?
This is where you were working for a company in the past and were a member of their pension scheme but no longer work there. This scheme could be a Final Salary scheme or a Defined Contribution Scheme. This could be a single previous employer or several. Many people also have Personal Pensions of various types which we can also look into and combine if beneficial.
When looking at a Company Final Salary Scheme the pension at scheme retirement age is guaranteed. Even if the company fails and the scheme is entered into the Pension Protection Fund (PPF) you are guaranteed up to 90% of the pension you may have received had this not happened. There is a PPF cap on this so if you are expecting a pension over £38,505.61 2017-2018 then it would drop to this if not already in payment and then be reduced by 10%. A transfer from a final salary scheme to a personal pension or stakeholder pension means that you would then be assuming the investment risk and also the annuity risk and there is no guarantee that you would be better off as a result. Having said that you are gaining control of your own pension and ring fencing it from any issues the old employer scheme may have or face in the future and giving yourself retirement flexibility from age 55.
Reasons to Transfer.
- You were there for over two years but not a long time and wish to combine all of your pension pots.
- You left under a cloud and wish to sever all connections with your former employers.
- The scheme is offering an enhanced transfer value and it looks like a good deal.
- You may wish to look at retiring from age 55 of phasing it in. There are early retirement penalties in the previous employer scheme.
- You think the previous employer could go out of business are worried that the Scheme Pension may end up in the Pension Protection Fund (PPF)
- The scheme is underfunded and has a shortfall.
- You no longer work for the employer. Your preserved pension is more than £38,505.61 (2017-2018 tax year) and if there is a chance the scheme may enter into the PPF before your retirement age of 65. Your preserved benefits will be reduced so you wish to ensure that you protect your retirement benefits.
- You are single and do not wish the company scheme to provide a spouses pension at retirement and may get a better deal elsewhere.
- Your health could be an issue in the future as you are not in the best of health currently.
- You wish to be in control of all of your pensions and make the decisions.
- The death benefit under the current scheme is not as good as transferring it out to a personal pension where it would be return of fund tax free on death.
- If your scheme is an Unfunded Scheme, State Sponsored in other words then you can’t transfer it. Legislation in April 2015 stopped all transfers out.
- Do you know what that scheme is going to give you at retirement money wise as your current pension stands?
- Do you know when the retirement date is?
- Can you retire earlier or access the money earlier than the scheme retirement age?
- Is the company still trading and taking new members into the scheme?
- What are the current Company Scheme benefits such as indexation of paid up members, indexation at retirement in payment, Guarantee Period, Spouses Pension, Death in Service pre and post retirement, How Much Tax Free Cash will you get at retirement. If you were to retire early, what is the cost in the scheme benefits and tax free Cash? There are lots of questions to ask your scheme. We can help with that.
- Would you be better off by transferring out and ring-fencing your fund?
- How long before you retire?
- Can you afford to retire? We can help with your retirement planning and help piece it all together.
- Have you applied for a state pension forecast yet? We can help with that.
- If you were to retire or access that scheme at say age 55 what would the scheme penalty be. (Assuming you are under age 55 currently)
- Are you over age 55 but under age 65 but could do with a cash boost from say the Tax Free Cash and or income from a pension Scheme you have?. We can help you.
- What is the transfer value of your benefits under that scheme? You may be surprised at the amount, many are. We can help you find out.
- If you were to transfer out what are the benefits, what are the costs and could it make a difference to you now or at age 55.
- We can find out all of this for you for free, yes free. You will need to contact us.