We are great believers in conducting regular reviews of your pension. However, sometimes the information you need is not always readily available. In fact, in some cases, you may be unaware that you have a pension or even several of them.
That’s because many people have contributed to several workplace pensions throughout their careers. If you are in such a situation, you are unlikely to still contribute to these pensions. Therefore, at best they are standing still, but they could be losing you money.
This article explains how you can track down lost or misplaced pensions.
The most straightforward way of tracking down a lost or misplaced pension.
If you know that you have lost or misplaced pensions, do not panic. There is a simple way for you to start relocating them, and that is by using the government’s online pension tracing service.
However, pensions can appear to be complex financial vehicles, and you may not feel comfortable dealing with them. In this case, it may be advisable to seek the services of a regulated financial advisor. As well as locating your pensions, they can give you a current valuation and comparison against other products on the market.
Their starting point will also be the government’s pension tracing service. All you need to do is provide them with a few basic details regarding your past employment for them to get started, check out Portafina.
Valuing your pensions.
As we alluded to earlier, if you are no longer contributing to your pensions, it’s unlikely they will be experiencing any growth. However, they could have a fair bit of money in them, adding to your retirement pot.
Therefore, it is worthwhile finding out precisely what each one of your pension funds is worth. You should also understand what features each of them offer, as frequently, these features can prove value too. Once you have done this assessment, you can then decide whether to keep all of your existing pensions or change them to a more suitable product.
If you are enrolled in older pensions, you may find that these carry higher charges. Despite this high level of fees, they may not perform as well as more modern schemes. Once again, an FCA-regulated financial advisor can help you understand such issues.
Transferring your funds to a different pension scheme.
As we mentioned earlier, older pensions tend to perform less well than the modern equivalents. However, you can transfer your pension funds between different schemes.
You may want to do this if your pension is underperforming, but you also may choose to do so to access other features. For instance, regulations introduced in 2015 means that with certain pensions you can access your funds from fifty-five.
However, understanding the details of your pension schemes can be challenging. Therefore you should consider using the services of a financial advisor to guide you through your options. They can assess your pension values and look at your financial situation regarding your needs and aspirations. Having done this, they can then look at the current market and find products that best suit your circumstances.
In 2015 the government introduced legislation making it easier for people to access their pension funds. This process is known as pension release.
Many pension holders can now take 25% of their pension funds as a tax-free lump sum. They can then take the remainder of their fund as lump sums, but these will be subject to tax at the appropriate rate.
Although this may be a beneficial feature if you need some cash urgently, you should bear a few considerations in mind. For instance, taking too much money from your pension pot too early could leave you short of income for your retirement. Also, taking more than the 25% tax-free amount could significantly impact the amount of tax you have to pay.
Pension release does not apply to all pension schemes. You can consult a regulated financial advisor if you wish to transfer your pension to one with this feature. They can talk you through the options available and make a recommendation according to your circumstances.
Starting up contributions to an old pension scheme.
Once you’ve relocated your old pension, you may want to restart contributions towards it. Whether you can do this or not depends upon what the terms were when you first set up your pension.
Even if you can start contributing again, this may not be your best course of action. Therefore, you should fully assess your pension’s value and its features before making a decision. Once again, a regulated financial advisor can help you with this.