It really is so important to regularly review your pensions. However, what if you don’t have the information on hand? Or, how about pensions you don’t know about? You might think that the latter of these situations is highly unlikely, but it is more common than you might expect. Read on to discover how to track old pensions, find out how much they are worth, and how to transfer them to more suitable schemes.
Tracking Your Lost or Misplaced Pensions
If you’ve changed employers throughout your working life, you could well have several workplace pensions on the go. Losing track or forgetting about these pensions is not disastrous, and it’s pretty straightforward to relocate them. The quickest and easiest method of tracking down an old pension is through the government’s pension tracking webpage. To get started, all you need are a few basic details about yourself and your employer.
Of course, you might not have the time or the inclination to track down your pensions yourself, so you may choose to use a regulated financial advisor to help you with this process. When they’ve tracked down your stray pensions, your financial advisor can give you an assessment of their value and also compare them to other products available on the market.
Valuing Your Pensions
If you haven’t contributed to your pension for some time, it is unlikely that they will have increased in value significantly. However, your pension fund could still have substantial value and provide you with income when you retire. To make sure you are maximising the power of your pensions, you should get each one assessed in terms of its financial value and the benefits it offers you.
There may be other pension schemes available to give you a better return or provide more beneficial features. An independent financial advisor can help you assess them and decide to stick with the ones you have or transfer your pensions elsewhere.
You might choose to transfer your old pensions because older schemes tend to come with higher administration fees and are less likely to perform to the same standard as modern schemes. Again, an FCA-regulated financial advisor can give you a fair assessment of how your funds are performing.
Transferring Your Pensions
You can transfer some types of pension, and this process is known as a pension switch. As we previously mentioned, older pensions tend to have higher fees and lower returns than more modern schemes, so there is little point in leaving your funds in a scheme that is not maximising your investment.
Another reason to make a pension switch is due to the features available with the scheme. For instance, one appealing feature of some pensions is that you can access your funds when you turn fifty-five. This facility is known as pension release. If this is an option you choose to take, a financial advisor can help you make the best decision based on your current situation and financial goals.
Pension release came about in 2015 when the government passed legislation giving people access to some pensions from fifty-five. When you reach this age, you can take up to 25% of your pension fund as a tax-free lump sum. You can also take further lump sums, but these will be subject to tax.
Taking a tax-free lump sum can be beneficial if you need a cash injection to pay for a significant event such as a wedding or a large capital purchase. However, you should be wary of taking too much money from your pot, as doing so could leave you short of income for your retirement. Also, taking more than the 25% tax-free sum can have significant tax implications.
As already alluded to, not all pensions can be accessed from age fifty-five. An independent financial advisor can guide you through your options for your pension schemes, and help you make the best decisions for maximising your funds.
Restarting Pension Contributions
Whether you can restart an old occupational pension depends on the terms of your pension when you first took it out. Even if you can restart your old pension, it might not necessarily be the best thing to do. It may be more prudent to get an independent assessment of your pension and compare it to those currently available on the market.
Before thinking about your pension, get in touch with a regulated pensions specialist like Portafina or, view the information at The Money Advice Service.