Transferring out of a stakeholder pension
Posted: September 26th, 2018, 9:48 pm
Many moons ago when the Motley Fool book came out and I was a young spring chicken I opened up a couple of index trackers. I am now 45 and starting to think I don't want to work until I'm 67.
I probably misunderstood the book at the time, but I've ended up with:
1. A FTSE ASX Index Tracker ISA with an annual fee of 0.1%
2. A FTSE ASX Index Tracking Stakeholder Pension with an annual fee of 1%
The ISA only has £3k in it because I stupidly dipped into it on several occasions. The Stakeholder Pension has £27k in it, but I've only just recently realised that a 1% fee is too much to be paying for a passive fund (because I'm an idiot).
I have £15k in Premium Bonds as a rainy day fund.
Thankfully, I also have a public sector defined benefit pension that I've been paying into for 12 years. So as long as I keep working I won't be living on baked beans in front of a Superser. BUT it would be nice to have a little extra put away, especially if it gives me the choice of taking 25% of it out, tax free when I'm 55. I'm a higher rate tax payer so I'm guessing it makes more sense to get the 40% tax relief from paying into a pension than to keep paying into the Index Tracker ISA.
Looking back I'm starting to feel like I have been a right numpty because;
1. 1% is far too much to be paying for a passive fund
2. I've been overpaying my mortgage by £500 for the last 18 months because I liked the idea of getting it paid off a bit earlier, but that money would also have been better going into a pension or some other sort of investment.
Also I've been on a few boards and have been told that it doesn't make sense to put all your money into one index, that you're better spreading it over different world economies.
So my questions are;
1. Should I transfer the money from my Stakeholder Pension? (and can I?)
2. If yes, where should I put it?
3. Should I put the 3k that I have in the tracker into a pension as well? (I'm guessing yes)
4. Can you get a pension that tracks a few different indexes over the globe and how do you what % put into each?
many thanks
I probably misunderstood the book at the time, but I've ended up with:
1. A FTSE ASX Index Tracker ISA with an annual fee of 0.1%
2. A FTSE ASX Index Tracking Stakeholder Pension with an annual fee of 1%
The ISA only has £3k in it because I stupidly dipped into it on several occasions. The Stakeholder Pension has £27k in it, but I've only just recently realised that a 1% fee is too much to be paying for a passive fund (because I'm an idiot).
I have £15k in Premium Bonds as a rainy day fund.
Thankfully, I also have a public sector defined benefit pension that I've been paying into for 12 years. So as long as I keep working I won't be living on baked beans in front of a Superser. BUT it would be nice to have a little extra put away, especially if it gives me the choice of taking 25% of it out, tax free when I'm 55. I'm a higher rate tax payer so I'm guessing it makes more sense to get the 40% tax relief from paying into a pension than to keep paying into the Index Tracker ISA.
Looking back I'm starting to feel like I have been a right numpty because;
1. 1% is far too much to be paying for a passive fund
2. I've been overpaying my mortgage by £500 for the last 18 months because I liked the idea of getting it paid off a bit earlier, but that money would also have been better going into a pension or some other sort of investment.
Also I've been on a few boards and have been told that it doesn't make sense to put all your money into one index, that you're better spreading it over different world economies.
So my questions are;
1. Should I transfer the money from my Stakeholder Pension? (and can I?)
2. If yes, where should I put it?
3. Should I put the 3k that I have in the tracker into a pension as well? (I'm guessing yes)
4. Can you get a pension that tracks a few different indexes over the globe and how do you what % put into each?
many thanks