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Reasons to leave existing pensions where they are: minimum values at maturity

Some pension plans guarantee that they will have a certain minimum value at maturity. These guarantees were typically offered on with-profits pensions from certain companies around 20 years ago.

Look for the term ‘guaranteed sum assured’ or ‘guaranteed maturity value’ on documents relating to the pension. Because expected returns were so much higher in the past, such benefits could be hugely valuable.

Some policies offered guaranteed minimum annual increases as an alternative.

If you are not sure whether your policy included these or other guarantees, or if you cannot find the relevant paperwork, ask the company where the pension is held: “Are there any guarantees of any type on my policy?”

If you do hold a pension with these kinds of guarantees, it may well be worth holding on to them until maturity rather than transferring the money to your amalgamated pot.

The decision will depend on how much the guarantees would improve on the current value of the plan (which you can request from the company concerned) and how long you have to wait until maturity. Expert advice may be worthwhile (see our article on advice). 


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