subject: Examining the advantages and disadvantages of a pension transfer [print this page] Examining the advantages and disadvantages of a pension transfer
There are numerous benefits and disadvantages to a pension transfer, and for those who are considering this course of action it is always a good idea to consider both sides of a pension transfer in great detail. A pension transfer isn't something to be taken lightly. A pension is really a valuable asset and should be looked after, it is the financial security which you will come to depend on when you reach retirement. For many a pension offers that much wanted security, for other people it might be that little extra to make ends meet. Yes, a pension is more than just money. It is what you will depend upon through your retirement years for comfort, security and stability. What exactly is a pension transfer, what does it involve and why should you contemplate it?
A pension transfer is the act of moving one's pension to a different pension provider. There are numerous reasons why somebody may do this. One may not be happy with their current pension provider. This could be because you feel you are paying fees above the odds, and perhaps unnecessary fees or charges or perhaps you might have a suspicion that your pension fund isn't performing to its full potential. Maybe the organization that your pension is with is enduring financial difficulty in which case it may be wise to take steps before it is too late and you risk losing your whole pension fund. Any moves carry some risk.
A pension transfer may provide the pension holder a host of benefits. If you are at the mercy of a pension provider billing you above the odds, chances are you can find a provider whos fees may well be more reasonable. A pension transfer can also be advisable if the current pension provider isn't producing the rate of performance for a pension that the pension is capable of achieving. You could potentially receive an overall better package from another pension provider. Maybe you will have a choice of retiring early. Pension transfers are often advisable if a person has numerous pension funds and want to consolidate all of them into one workable pension plan. There are particular pension providers who also give the pension holder more say in just how their fund is invested. This can be better than a current pension provider who gives little if any say in how money is invested.
As you have seen there are many benefits, but what about the possible downsides of a pension transfer?. You could find yourself transferring your pension fund to a provider and end up losing out over time because the new provider is in fact worse compared to the original one. Plus if you decide to consolidate a number of smaller pension funds, if your chosen provider does not live up to expectation then you'll be left with nothing to fall back on, as you would have been had your pension funds stayed with assorted providers.
Prior to going ahead with a pension transfer, it will always be best to seek professional help and advice from one of many companies offering pension advice to people. Such companies are able to look at your personal circumstances and provide advice specific to you that will make sure you make a well informed decision.
