Dealing with my old insurance company pension was like stirring treacle. Slow work. Hard work. When I took it out, it was a good pension, amongst the best of its time. It had reasonable fund choices, low charges and my employer paid into it as well as I did.
However, the only way I could find out how it was doing was by ringing up and going through a “press one for this, two for that” automated system. There was no on-line access and fund switching involved a painful paper trail which seemed to take weeks. Consequently I paid little attention to my pension and when the annual statement arrived, it was filed away without too much consideration.
Today, that old insurance company pension scheme has gone; I transferred the value into my SIPP some years ago. My employer pays in contributions monthly and I periodically add lump sums depending upon my cash flow. My SIPP is also much more user friendly than my old pension scheme which has reinvigorated my interest.
I am sure you will agree with me, the easier it is to do something, the more interesting something is, the more likely you are to do it. This may seem obvious but as an example, don’t you find that you check your balance and use your bank much more since you have been able to do so online from your computer at home? I think the same applies with everything, especially pensions.
Dealing with my SIPP compared to the old scheme is like comparing chalk and cheese – I actually find it easier dealing with my SIPP than I do with my online banking service. My SIPP has brought my pension planning to life and there is rarely a week when I don’t quickly log in to check the value or see how the investments are doing.
You could be invested in a scheme where the charges are high or the choice and performance of the funds poor or perhaps both. You may not be paying in enough. Crucially if you aren’t reviewing your pension (because it isn’t easy) you may not even realise this.
I am absolutely convinced. Once you have experienced how easy pensions can be using a SIPP, you’ll never look back.
Before you transfer your pension you should check there are no penalties, costs, market value reductions or other loss of guarantees if you do so. If you have any doubts, or are considering transferring a final salary pension scheme, you should take independent financial advice. For more information visit the SIPP section of the Hargreaves Lansdown website, other SIPPs are available.