Salam all,
I have some pension pots from previous employers that I am looking to consolidate. I have a defined contribution pension pot with Aviva from an old employer with about £15k in it which has an annual management charge of 1.05% (100% funds invested in HSBC shariah compliant fund).
I also have a Scottish Widows defined contribution pension pot from an old employer with about £1300 in it with an annual management charge of 0.7% (100% funds invested in HSBC shariah compliant fund).
I am looking to move both of these pots into my current employer’s fund which is a defined benefit scheme (100% funds invested in HSBC shariah compliant fund)…
With regards to the Aviva pension, the transfer value would buy an additional pensionable service of 81 days and the transfer value would give me an estimated pension of £194.88 a year payable from age 65. When I retire, the pension will be based on my higher pensionable salary at the time (including all interim pay awards and promotions). If I left it with Aviva, as it stands, my pension plan could be worth £360 a year.
With regards to the Scottish Widows pension, the transfer value would buy an additional pensionable service of 7 days and the transfer value would give me an estimated pension of £16.84 a year payable from age 65. When I retire, the pension will be based on my higher pensionable salary at the time (including all interim pay awards and promotions). If I left it with Scottish Widows, as it stands, my pension plan could be worth £2 (low), £7 (middle) or £21 (higher) a year.
Neither the Aviva nor the Scottish Widows pension pots have a protected tax-free lump sum (just the standard 25% on both). I do not have the right to access my pensions before 55. There are no fund guarantees or bonuses and there is no protection included such as life cover, critical illness cover or waiver of premium.
There is no charge to transfer the pensions is, so with all of the above, is it worth it?
In the letter from my employer it says the transfer value may be more or less than your actual pensionable service of your previous scheme (less seems to be the case) but you should instead concentrate on their respective benefits.
Would appreciate any thoughts and advice on this matter.
Jazakallah khairan
Tarek