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We are great believers in conducting regular checks on pensions and other investments. However, how can you do this if you don’t have the correct information? In fact, how can you check a pension if you don’t know it exists?

Believe it or not, thousands of people have old pensions they have lost track of. This short article aims to explain how to find lost or misplaced pensions, assess them, and get them working towards your retirement. Planning for your long term future is crucial; when considering your pension, take on expert advice from a specialist such as Portafina.

Tracking your old pensions

The most common instance of people losing track of a pension is a workplace pension scheme. If you have moved employers regularly throughout your career, it is understandable that one or more of your workplace pension schemes may have become misplaced. However, all is not lost, and it is relatively straightforward to relocate your money.

The government provides an online search facility to help relocate old pensions. Many people choose to use this service themselves. However, many others find dealing with pensions complicated, so they would instead leave it to a professional. Either way, all you need to do is provide some basic details about yourself and your employment.

Valuing your pensions

It’s unlikely that you will still contribute to a pension if you have lost it. As such, your fund is unlikely to have grown since your contributions ceased. However, it could still contain a considerable amount of money. 

To decide whether to restart contributions or transfer your pension to another fund, you need to know its value. A regulated financial advisor can assess how much your pensions are worth. They can also check what fees you pay and how well your pension is performing.

Newer pensions generally perform better than older plans, and they also tend to come with lower charges. Of course, you may be able to assess these things yourself, but professional financial advice can also come in handy.

Transferring your pension funds

In certain instances, you may be able to transfer your pension funds to a more effective plan. This process is known as pension switching or pension transfer.

As you mentioned in the previous section, an older pension plan could have higher charges. Transferring your funds to a more modern scheme could save you money. 

There are other benefits that you can access through pension switching, such as pension release. The government introduced this feature following legislation passed in 2015, giving people access to certain pension funds from age 55.

To ensure you’re making the right decision about transferring your funds, it may be a good idea to consult a regulated financial advisor. They will look at your unique situation, help you assess your pension’s value, and explore the options available to you.

Pension release

As mentioned above, pension release is a beneficial feature of specific pension schemes. It is worthwhile taking a closer look at this aspect of your pension.

In 2015, the government introduced legislation enabling pension holders access to their funds from age 55. If your fund qualifies for pension release, you can access up to 25% of your funds as a tax-free cash lump sum. The remainder of your money can remain invested in the pension, or you can take it as taxable lump sums.

Before deciding to take too much money as a lump sum, you should consider the impact on your retirement. Firstly, it could leave you short of income when you retire. Also, you may face a large tax bill if you take lump sums of cash.

Once again, it could prove beneficial to consult with a regulated financial advisor to assess your options regarding pension release.

Restarting pension contributions

We often get asked if it’s possible to restart contributions into old pension schemes. The short answer is yes, but it all depends on the terms you initially signed and taking out your pension. Even if you have an option to restart contributions, it may not be your most cost-effective option. It may be better to see what is available on the current market, thereby getting a scheme that fits your current needs.