Why Would you Want to Transfer?

Particularly now as the automatic enrolment at the workplace is beginning, many people will have pension pots growing with their employers. However, very few people now-a-days will stay in the same job for life. So you could want to transfer your money because you are no longer an employee of the same company. You may also want to transfer pension money if you have several pension schemes that you want to consolidate into one, or you may feel that you aren’t getting a very good deal and want to find a pension with better benefits.

Freeze or Transfer?

If you are moving jobs, then instead of moving your money, you could freeze it. Freezing your pension means that you stop paying in to it. Your money will still grow with the fund that is already in place, and you will get the money when you reach the designated age (depending on how long you were contributing to the fund- some schemes require that you contribute for a certain amount of time, otherwise you will lose the money) but you cannot add any more to it than you already have. You may also be able to continue contributing to your pension from your pervious workplace.

Company or Private?

Corporate schemes generally have quite good benefits, and they are a good option for those who plan to be in the same job or working for the same company for a long time. However if you are more unsure of your future, then a private pension may be better for you. They offer the flexibility of paying into a scheme no matter where you work, or if you decide to become self-employed or stop working.

The Costs

There may be a fee attached to transferring your pension, from the existing pension provider, the advice provider or the new pension company. If your pension pot is quite large then these costs will not significantly affect your pension pot and will be worth the cost.

Get Advice

The only way to really navigate your way through pensions is to start early, and get good advice. Unless you have the time and the resources to really understand pensions, you cannot know everything you need to make an informed decision. There are people out there that are dedicated to knowledge in the pension sector, and therefore can give you the best advice for your pension transfer. The advice providers should be regulated by the Financial Services Authority, and any literature they might send you should state that the business is authorised. To get the best knowledge of the market and unbiased advice, look for an adviser that is independent so they can give the best advice for you.

Shopping Around for Annuity

New measures drawn up by the Association of British Insurers (ABI) this year will ensure that pension providers who are members of the association will have to help their customers find better annuity deals, even if this means that the customer ultimately goes elsewhere.

Surprisingly, not all people decide to shop around when choosing their annuity, despite the fact that this will provide them with income throughout the entirety of their retirement, and the fact that by shopping around they might possibly increase their annuity by up to a third.

Comparing annuity rates is quite simple. You can do it online with the FSA, compare rates from various providers using Hargreaves Lansdown’s free annuity comparison service, or speak directly to an expert pension advisor.

What Annuity Rate Options Are There?

There are many different annuity options available, all of which will offer you differing amounts of money when you retire, depending on your needs. You must think about what you want to achieve with your annuity, and ask yourself:

• Do you want to convert your savings in stages, using a phased retirement plan?
• Are you well, and have you ever indulged in any harmful pursuits such as smoking?
• Do you want to be able to draw the same level of income from your annuity for life?
• Do you want your annuity to also provide an income for your partner after you die?

By asking these questions, and others, you will be able to determine exactly what kind of annuity you should be looking for when you decide to convert your pot into retirement income. The most important thing to remember is that you are under no obligation to buy an annuity. So if you are thinking about buying one, take your time, shop around and get sound financial advice beforehand, so you when you retire you will be able to see the maximum return on your years of hard work.

Getting Good Financial Advice

If you’re not sure about how to go about finding the best annuity rates for your needs then it may be time to consult with an expert financial advisor who will be able to talk to you about all of your retirement options. Independent pensions experts, such as those found at www.pensionswms.co.uk, will not only offer you advice but will be able to draw up a comprehensive retirement plan which will cover you for all eventualities, including making provisions for loved ones. With the proper consideration, your annuity should be able to provide both you and your loved ones with the retirement security you deserve.

Automatic pension enrolment pushes the question of whether to join a scheme to the forefront of many UK workers’ minds. Actively opting out of the scheme will be a bold decision that many workers won’t take and so some forecasts have projected that up to 10 million new pension schemes will be put into place in coming years. If you’re over 22, earning more than £8,105 per year and work or ordinarily work in the UK you will be eligible.

The scheme will initially demand that 2% of your earnings are put into your pension pot, rising to 5% in 2017 and 8% in 2018. Employers will have to contribute a minimum of 1% in 2012, 2% in 2017 and 3% in 2018. Any employers who don’t have pension schemes in place can forward workers to the NEST government enabled not-for-profit organisation’s scheme.

The auto enrolment scheme is a potentially huge government initiative with many questioning whether a state pension will even exist in years to come. This could be the first phase of phasing the state out of the lives of older people. There will be a huge advertising campaign beginning in September to make people aware of the schemes introduction and the debate could become a political hot potato.

Whatever your thoughts may be on the schemes feasibility, any provision is better than none, and similar schemes have worked well in places like Canada who thought on similar lines as early as 1966.