Here are the options chosen by two sisters who have decided to take a big step.

Jo and Hannah Sampson have made a big decision. The sisters have decided to resign from their jobs and go into business together. As Hannah, who works in logistics for a company that supplies the restaurant industry, explains, “We’re both interested in and work in the food industry. It was time to put our skills to our own project – so ‘The Secret Kitchen’, a catering company, was born”. Her sister Jo, a chef for a large hotel chain, puts it another way.

“Hannah is the risk-taker in the family. She’s convinced me that the time is right for us to do this. We’ve been talking about it for years.” While they’re busy making decisions on their target market, pricing and marketing strategies, there are other things they know they need to think about. One of them is what to do with the pension accounts they have with their current employers once they’ve resigned.

Jo wants to stay put

She prefers not to have to think about her pension savings right now.

One option is to leave her account invested in her current employer’s pension scheme

  • Most schemes will allow you to do this indefinitely at no cost.
  • You can decide at any time to transfer your savings to a personal pension plan or a new employer’s pension scheme - usually at no cost.
  • She’ll become a deferred member of her scheme.
  • She’ll be able to change her investment options if she wants to and monitor her pension account on PlanViewer.
  • Her scheme may not allow her to make any more contributions to her pension account so she may need to think about how she’ll save for retirement.
  • Some types of schemes will allow her to make lump sum contributions to her existing account.
  • She may also have the option to set up a new pension account, which isn’t linked to an employer, and make regular contributions to it. She may be able to transfer the value of her existing account to the new account.

Hannah wants to use her options

She has some money she made from the sale of a flat she owned with a friend. She’s keen to use this to boost her pension savings and benefit from the tax relief on it. She also has a pension account from an old employer and wants to consolidate all of her pension savings.

One option is to transfer the current value of her pension account with her current and past employers to a personal pension plan

  • You can set up a personal pension with the pension provider of your choice.
  • It’s linked to you, not your job or employer.
  • Transferring your savings to a personal pension is usually free of charge.
  • Most personal pensions allow you to choose your own investments.
  • She’ll be able to consolidate all her pension savings in one plan so it’s easier to manage.
  • She’ll also be able to contribute to her new plan and earn tax relief on those contributions.
  • There are many companies that offer personal pensions so she’ll need to spend some time thinking about her choice.

Both Jo and Hannah should get in touch with Fidelity to discuss all their options so they have the facts to base their choice on (contact: 08457 234 235 or pensions.service@fil.com). If necessary, they should also speak to a financial adviser who can help them compare the different options.