Multiple pensions - Where are they now? It is very common during our work life to have 5 or 7 employers each with their own pension schemes and trying to keep track of them can often be quite difficult. Pension providers over the years have often been taken over or merged with other companies, which only heightens this problem.
Often people will have lost the details of their pension if say they have moved country or may even have discarded some schemes as they were with an employer for only a short amount of time.
All or some of these factors mean people are often faced with not actually knowing who holds their pension let alone what the value is.
Tracking down lost pensions?
A client's typical scenario could be “I have four pensions each one from a different type of scheme from four previous employers. I have details on three of them, but no details on the fourth company. How can I find out what this pension might be worth?”
Pension benefits from even short periods of employment can run into many thousands of pounds, but often we don't bother to track them down as we think they will not be worth much, but it's often not the case, so it’s in your interest to track these pensions down and claim the benefits, after all it’s your money.
So how do you track down a lost pension?
The best place to start in tracking down a former occupational pension is The Department for Work and Pensions they run a tracing service. The phone number is 0044 845 600 2537 or you can visit their website at www.pensionservice.gov.uk. Also, do not underestimate the importance of your State Pension. For a free forecast visit the same website. It’s important that when you take your pension you take the full benefits that you have earned throughout your working life.
Many pension providers offer to switch your money into safer funds as you get closer to retirement. This method of switching is often referred to as “life-styling” and is designed to protect your pension fund in the event of a big market fall close to retirement. Over the past 2-3 years pension funds have fallen dramatically, which raises the question “is now the right time to switch or am I better off staying put in the hope the market recovers back to its previous market high?” Whether to switch or stay depends on your tolerance to risk and how important this pension is to your overall retirement. If you have other pensions and it is a small fund, you may be able to afford to leave it invested past 65, giving it more time to recover before you need to draw an income.
A hot topic at the moment and one which has been written about extensively over the last couple of years, is to transfer funds into a QROPS (Qualifying Recognised Overseas Pension Schemes). This enables you to effectively retire, draw an income from your fund but still benefit from any surge in the market. You transfer your pension funds into such a scheme and then you can choose how you drawdown your income from the pension fund. The money can therefore stay invested and can benefit from the market recovery.
Dig out all the old papers and letters from the various pension providers and insurance companies and contact the company to ensure that they have your present contact details and also ask them for a valuation. It’s important that you claim all the money that you are entitled to from your pension companies.
Alternatively talk to a qualified financial advisor such as Affinity Global Wealth, they can then talk you through all the options available, carry out a detailed analysis of your pension and help to determine whether transferring your pension is right for you. You can authorise them to talk to your pension providers on your behalf so you don't have to.
If you would like more information on QROPS then visit our website and download our free guide.
You can contact me Daniel McGonigle, Managing Partner at Affinity Global Wealth on (+351) 91 279 2998.
Affinity Global Wealth
Av. Vilamoura XXI, Edifício Portal,
Bloco B -1B, 8125-406,
T: +351 289 314 530
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Affinity Global Wealth is a trading style of Global Partners Limited which is authorised and regulated by the Financial Services Commission (Gibraltar), Licence Number FSC1118B and registered with the Instituto de Seguros de Portugal and the CMVM in Portugal.