I’d been meaning to aggregate all of my pensions for years. Four different plan’s accumulated from employers over a twenty year period meant that I simply wasn’t keeping track of performance. I had little understanding of where the funds were invested and no idea of overall diversification.
Worst of all, I had no idea of their combined value.
A little worrying considering these investments are supposed to be providing for me in retirement, wouldn’t you agree?
The problem was that I felt completely detached from these investments. With statements coming in once or twice a year to prompt me, the thought of all that administration and resulting costs from a professional adviser meant that I never got around to doing it.
New year, new start
So, I decided that the new year was the time to put that right. Inspired by a book I had read called ‘How to own the world‘ by Andrew Craig, I realised that I could transfer my four separate pensions into a single Self Invested Personal Pension or SIPP, from where I could manage the investments myself.
So, I opened a SIPP account with one of our featured partners, Hargreaves Lansdown which proved to be nice and straightforward. I chose this account because it offered access to a market leading selection of funds, ETFs and company stocks. Trading costs and commissions were competitive too, meaning I could realise more growth as a result of the smaller fees.
Of course, there are plenty of other SIPP providers for you to choose from. Do your research and find a broker that offers you the right service.
Transfer pensions to a SIPP account
Transferring pensions to a SIPP account was far simpler than I’d imagined too. Having spoken to (or tracked down in the case of my oldest pension) each provider and received assurances that there would be no penalties for transferring my investments, I was able to complete Hargreaves Lansdown’s transfer form online and, over the course of the next 10 days, received a series of emails informing me how things were progressing, before finally getting the go-ahead to start allocating my funds.
Now, it’s worth noting that, if you are in a similar position to me, there are instances where transferring pensions to a SIPP can prove to be an expensive and inefficient process. It all depends on your provider and the type of product you own. I would suggest considering independent professional advice if you are made aware of any costs associated with a transfer. Sometimes, it can be more efficient to leave a pension where it is.
Where to invest?
Now, taking control of your own investments may sound like a scary thought for some – but it really needn’t be. You’ll have access, through any good SIPP account, to many of the funds that your pension would have invested in through your previous provider.
To keep things simple, you might choose to replicate the allocations that your existing pension funds were invested in – or their equivalents. Hargreaves Lansdown offer ready-made portfolios with a range of risk levels, designed to cater for most investors. Check out their Portfolio+ and Master portfolios for investment ideas.
If you are a little more experienced, you’ll want to follow your own path.
That’s the route I took.
You can check out my own personal investment strategy and see regular updates on how my SIPP is performing through our long-term investment strategy forum which I’ll be using as a diary. It’ll help you with your own planning and enable you to learn from any mistakes I make along the way. Feel free to ask questions or make comments and I’ll be sure to come back to you.
Gain control of your financial future
Now I’m actively managing my pension, I’m far more interested in how it’s performing.
I have set performance goals and will regularly review allocation levels over the course of each year, designed to ensure that my investments stay on track. Of course, there’s an element of concern whenever the markets drop – but I’ll be putting aside any concerns and trusting my long-term plan.
The important thing is that I feel like I’m in control. And that’s got to be a good thing, right?