Previous Employer Schemes

Previous employer schemes can be a little more problematic than schemes you have taken out yourself. They are also often more complicated. Much depends on the type of scheme you were in, and the type of benefits it provides.

There are three types of scheme that employers normally provide, and the transfer implications depend on the type offered. We will always investigate and discuss the options with you, before we make any recommendations.

Final Salary Schemes 

These pension schemes provide known benefits at retirement, and are backed and funded by your employer. There have however been issues in the past over such schemes not being able meet their liabilities, and not being able pay the expected pension to some members. This is less of a problem now due to new legislation and the introduction of the Pension Protection Fund, although this does not necessarily guarantee the level of benefits.  

If you have an pension scheme there are four main possible reasons to want to transfer it to a personal scheme.

1. Transferring the scheme may allow you to take benefits earlier than the scheme will allow.

2. It may provide you more tax-free cash

3. It may provide better lump sum death benefits

4. It provides more flexibility and greater personal control

There are a number of potential disadvantages in transferring your benefits away from a final salary scheme, in particular the loss of a known benefit, and it could also mean a lower income in the future.

Occupational Money Purchase Schemes 

These work in a similar way to personal pensions, in that the level of benefits available partly depend upon the amount of the fund when you retire. There are however also inland revenue requirements about maximum benefit levels which are linked to earnings.

Many of the same investment issues apply to this type of pension as to a personal pension, i.e. fund choice/performance and also possibly charges. There are other considerations, such as breaking the link with the employer and also death benefits.

Group Personal Pensions

These pension schemes are just a collective way of running personal pensions, and the investment and charges considerations apply to whether or not they should be transferred.

We Can Help

Whatever type of pension you have we can help. We will always discuss what you want, and explain how a transfer would help you and the possible disadvantages. Just contact us to discuss in more detail.

transferyourpension.co.uk is a trading style of the The Policy Servicing Company Ltd which is an appointed representative of Independent Investment Solutions Ltd, which is authorised and regulated by the Financial Services Authority.
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