I often support the benefits of regularly reviewing your pension plans. However, what can you do if you don’t have your pension information readily at hand? Moreover, what happens if you have pensions that you have lost or forgotten about?
This short article aims to inform you about how to trace old pensions and what options are currently available to maximise your retirement investments.
How to track down old pensions.
Losing track of a personal or workplace pension does not mean it’s gone forever. Tracking old pensions down is relatively straightforward, and you can do this through the gov.uk website. To access the service, all you need or a few basic details about your employment and yourself.
Of course, you might find dealing with pensions complex, or you might not want to spend your time doing this. In this case, you may be better off using a financial advisor to help you locate old pensions. As well as finding them, a financial advisor will help you assess their values and compare them with other products available to you. Check out Portafina.
Valuing your old pensions.
If you have ceased contributions to your pensions, they will probably not have had any growth since. However, there could still be a considerable amount of money in these pensions, and that will be valuable to you when you retire.
Therefore, you should get all these pensions valued. Doing so will allow you to compare them with what’s currently available, so you can decide whether to keep them, combine them, or switch them to another scheme.
Older pensions might not benefit from recent technological advances. Therefore, they may have higher charges and lower performance than the modern equivalents. Valuing a single pension is straightforward, and you just need to contact your pension provider. However, if you have multiple pensions, you may want to consider using a financial advisor.
Transferring your pension funds.
In some instances, you can transfer your pension funds to another scheme. This process is known as pension switching or pension transferring.
You might want to consider pension switching if you have an older plan. As mentioned earlier, older plans tend to perform less well and come with higher charges than modern schemes. Therefore, switching could yield a more considerable amount of money over the lifetime of your plan.
There may also be other features that make it appealing to switch pensions. For instance, your old plans might not come with pension release. This freedom came around in 2015 with the introduction of regulations giving people the right to access their pension funds from 55. However, these regulations did not apply to all pensions.
Pensions can be complex and challenging to get your head around. Therefore, you might want to consider using a regulated financial advisor to help you assess the value and benefits of each of your pensions. You will then be better positioned to make an informed decision about them.
Pension release came round in 2015 when government legislation enabled people to access their pension funds early. At 55, you may not be able to access a quarter of your pension pot as a tax-free lump sum of cash. You can leave the remainder of your funds invested in the pension scheme or take them as taxable lump sums.
Pension release can be beneficial in many situations, particularly if you need an urgent cash injection. However, you should consider the effect taking too much cash early will have on your retirement income. Also, taking more than your 25% tax-free portion could have a significant impact on your tax bill.
Pension release does not apply to all pensions, so you should check your charms to determine if it does with your scheme. A regulated financial advisor is an excellent person to consult to help you make the best decision given your circumstances.
Restarting contributions to old pensions.
You might be able to restart contributions to old pension plans. However, whether you can or not depend upon the terms you signed up to when you first started the plan. Also, restarting contributions may not be your best option, as more cost-effective products may be available. Once again, before deciding to restart contributions to your pension schemes, you should consult with a regulated financial advisor.