With a workforce that’s more mobile than ever before, in Ireland there are lots of people finding themselves in the situation of having a host of pension pots dotted all over the place. If you’re someone who fastidiously keeps your finger on the pulse of your finances, this mightn’t be a problem. However, more and more people, by their own admission are very forgetful or disinterested when it comes to this sort of thing.
People leave jobs for a whole range of reasons such as redundancy; they move to another job; they emigrate or they simply give up work to enjoy a life of leisure. No matter why you have moved job, if you’ve left a job where you were a member of a pension scheme, unless you have done something since, you will have money in a pot with your name on it somewhere. The three big questions to should be asking yourself about that pot of pension, or pension pots are:
- Where is your pension or where are your pensions now?
- What’s your money being invested in?
- What is your pot paying for the investments being made?
You will no doubt have received correspondence about your dormant pension pot over the years, but if you’re like most people you’ll have filed these away in your “To Do Later” file and they have never seen the light of day since. Don’t get us wrong, we’re not trying to make you feel guilty here, we just want you to make sure that you’ve made a positive decision to do nothing, rather than doing it by accident or ignorance.
The important thing to say about any pension pot with your name on it is that it’s yours and you have every right to make decisions about where that money is invested. Many people avoid making these decisions because they’re wary of re-establishing contact with an old employer, or they simply don’t know what to do. This is a real shame.
Imagine you discover a dormant bank account that you’d forgotten about with a few thousand pounds in it. You’d quickly get on with sorting out what you’re going to do with it, wouldn’t you? When put that way, it’s illogical, but people don’t apply the same rules to what they think of as frozen or dormant pensions; and that’s a real shame.
When money is well invested it can grow surprisingly quickly and even a small pension pot can grow into a meaningful sum in a relatively short period of time. When money is badly invested, the owner of that money is losing out, because transferring the money to a better performing fund could make a huge difference to the return they get. While investment choice depends on things like your age, your attitude to risk and when you want access to your fund, an well managed fund normally significantly outperforms a fund that is left unloved and unlooked at. And the good news is that only a few percentage points of difference could make a significant difference to your pension when you come to retire.
The simple point we’re making here is that your dormant pensions might be extremely well managed and might be outperforming all the other investment options open to you, but if you don’t look at them from time to time, you’ll never know whether the news is good or bad. So, if you do nothing else from a financial planning point of view in 2015, we’d urge you to do something about the pension pots that are lying about with your name attached to them.
Even if you’ve got no documentation, or you’ve forgotten about which schemes you might be assocated with, we can help. We will track down your old company pension policies and put them into your personal name so you can take control of them. Once you’ve done this, you’ll benefit from:
- No longer having to deal with previous employers
- Full control of your pension so you can make your own investment decisions.
- Knowing exactly how much you have in your pension at all times, by checking online if you wish.
- Being the one who decides how much you’re prepared to pay for management charges.
If you suspect that you might have some dormant company pension schemes in your name, why not get in touch? At All Financials, we offer a completely FREE and without obligation initial consultation, during which you’ll be able to decide which is the best pension route for you.
Author: Fran Cooke
