Pension Transfer Costs - Reality Check
Discussion
I know 2/10 of sweet FA when to comes to pension admin / costs. With that in mind I just need to check if the costs I’ve been quoted today are reasonable.
I have a couple of small pensions, which have been trundling along since the 90s. I know they could be better managed and so sought the advice of a pension advisor via our accountant (same franchise group)
Nice enough guy, and all the advice sounded reasonable from our initial free consultation, and the growth rates sound better than the incumbent providers. At this stage its all a bit fluffy anyway. Nothing concrete, just ball park ‘what ifs’.
When I asked about fees, the arrangement is 2.86% one off transfer fee of the lump and the 0.8% ongoing.
No problem with paying for a service, but the transfer fee sounds a bit pricey. It s a few £ks.
Having nothing to base this on for comparison it maybe the going rate. What s the PH collective think?
I have a couple of small pensions, which have been trundling along since the 90s. I know they could be better managed and so sought the advice of a pension advisor via our accountant (same franchise group)
Nice enough guy, and all the advice sounded reasonable from our initial free consultation, and the growth rates sound better than the incumbent providers. At this stage its all a bit fluffy anyway. Nothing concrete, just ball park ‘what ifs’.
When I asked about fees, the arrangement is 2.86% one off transfer fee of the lump and the 0.8% ongoing.
No problem with paying for a service, but the transfer fee sounds a bit pricey. It s a few £ks.
Having nothing to base this on for comparison it maybe the going rate. What s the PH collective think?
I'm not expert but had a few pensions knocking about. Combined them in to one and paid 0 fees at all for the transfer. As its an active group penions by annual fees are currently 0.3%.
Is the trabsfer fee payable to the place you're transferring from or to? If from then possible it's in the T&Cs and you have to pay it. If it's to then I would look elsewhere.
Is the trabsfer fee payable to the place you're transferring from or to? If from then possible it's in the T&Cs and you have to pay it. If it's to then I would look elsewhere.
butchstewie said:
Do you want or need upfront or ongoing advice?
Transferring a pension (assume it's a DC pension) should and could be as simple as choose a provider and transfer it I would have thought.
A bit of both, and don’t mind paying. Certainly the 0.8% ongoing didn’t seem outrageous considering its a managed fund. Transferring a pension (assume it's a DC pension) should and could be as simple as choose a provider and transfer it I would have thought.
Just the 2.8% seemed a chunk.
Scabutz said:
I'm not expert but had a few pensions knocking about. Combined them in to one and paid 0 fees at all for the transfer. As its an active group penions by annual fees are currently 0.3%.
Is the trabsfer fee payable to the place you're transferring from or to? If from then possible it's in the T&Cs and you have to pay it. If it's to then I would look elsewhere.
The fee was to the advisor. Not sure if there are exit fees from the existing.Is the trabsfer fee payable to the place you're transferring from or to? If from then possible it's in the T&Cs and you have to pay it. If it's to then I would look elsewhere.
An I correct in thinking that you can t transfer these yourself. I m pretty sure last time I spoke to the existing providers they said they wouldn’t deal with me directly.
Edited by Ham_and_Jam on Wednesday 12th November 17:43
Ham_and_Jam said:
Scabutz said:
I'm not expert but had a few pensions knocking about. Combined them in to one and paid 0 fees at all for the transfer. As its an active group penions by annual fees are currently 0.3%.
Is the trabsfer fee payable to the place you're transferring from or to? If from then possible it's in the T&Cs and you have to pay it. If it's to then I would look elsewhere.
The fee was to the advisor. Not sure if there are exit fees from the existing.Is the trabsfer fee payable to the place you're transferring from or to? If from then possible it's in the T&Cs and you have to pay it. If it's to then I would look elsewhere.
An I correct in thinking that you can t transfer these yourself. I m pretty sure last time I spoke to the existing providers they said they would deal with me directly.
Ham_and_Jam said:
The fee was to the advisor. Not sure if there are exit fees from the existing.
An I correct in thinking that you can t transfer these yourself. I m pretty sure last time I spoke to the existing providers they said they would deal with me directly.
Possibly depends on the provider. With mine I did it all online with Standard Life. Put in the provider, policy number and rough amount and within about 3-4 weeks it was done and transfer complete. I was transferring from Royal London, Aviva, and AegonAn I correct in thinking that you can t transfer these yourself. I m pretty sure last time I spoke to the existing providers they said they would deal with me directly.
Not quite the same but I transferred both a DB pension using a CETV and a DC pension fund - 4 years ago - both not small pots - but paid exactly 0 for all of the work on both.
I also transferred my wife’s SIPP at the same time and again 0 upfront costs.
There were / are exit fees on all 3 but these cease next year.
However I note that if transferring today there would be an upfront fee and no exit fee.
Maybe my timing was good but I certainly wouldn’t be wanting to pay the percentage fee you have quoted.
For reference my ongoing charges on the old DB transferred pot are 1.30% including absolutely everything.
I also transferred my wife’s SIPP at the same time and again 0 upfront costs.
There were / are exit fees on all 3 but these cease next year.
However I note that if transferring today there would be an upfront fee and no exit fee.
Maybe my timing was good but I certainly wouldn’t be wanting to pay the percentage fee you have quoted.
For reference my ongoing charges on the old DB transferred pot are 1.30% including absolutely everything.
Assuming DC pensions, transfer them to one provider yourself (someone like AJ Bell) and then if you want some ongoing advice then consult an IFA.
If DB pensions then you have no option (since 2015) but to take independent advice which you would have to pay for (if you can find anyone to do it!)
If DB pensions then you have no option (since 2015) but to take independent advice which you would have to pay for (if you can find anyone to do it!)
craig1912 said:
Assuming DC pensions, transfer them to one provider yourself (someone like AJ Bell) and then if you want some ongoing advice then consult an IFA.
If DB pensions then you have no option (since 2015) but to take independent advice which you would have to pay for (if you can find anyone to do it!)
Its 2 small DC pensions, I m pretty sure last time I asked one of the incumbents they said they would only do it via an IFA. Is that bIf DB pensions then you have no option (since 2015) but to take independent advice which you would have to pay for (if you can find anyone to do it!)
ks?They are both quite old schemes, so no online support.
bennno said:
just move one pension in to the other, whichever is performing the best and has the lowest annual fees.
I consolidated 5/6 different pensions under Scottish Widows, the scheme is doing very well and I pay 0.3% annual fees.
It cost nothing to consolidate them.
What is considered doing well these days.I consolidated 5/6 different pensions under Scottish Widows, the scheme is doing very well and I pay 0.3% annual fees.
It cost nothing to consolidate them.
Both of mine are averaging 5%. The financial guy said the platform he would put me on did 12% last year.
Ham_and_Jam said:
What is considered doing well these days.
Both of mine are averaging 5%. The financial guy said the platform he would put me on did 12% last year.
If you're talking to an advisor and they're talking performance I'd say be cautious and make sure you know what you are invested in now and what they are proposing investing you in.Both of mine are averaging 5%. The financial guy said the platform he would put me on did 12% last year.
I could tell you the platform I'd put you on did 25% this year but it probably won't be the same risk profile as what you're in right now.
You get the idea
butchstewie said:
If you're talking to an advisor and they're talking performance I'd say be cautious and make sure you know what you are invested in now and what they are proposing investing you in.
I could tell you the platform I'd put you on did 25% this year but it probably won't be the same risk profile as what you're in right now.
You get the idea
Absolutely, and appreciate the advice.I could tell you the platform I'd put you on did 25% this year but it probably won't be the same risk profile as what you're in right now.
You get the idea
I’m quite financially astute, but I ve never realy done pensions the the degree I should have. My main investments are in other areas, but having re-looked at a couple of old pensions I have, they need my attention as they were a bit bigger than I remembered.
I thought using an IFA would help fill in my weak areas, but I just felt he was lining his own pocket.
Maybe a second more local IFA is my next step to get a benchmark.
Ham_and_Jam said:
What is considered doing well these days.
Both of mine are averaging 5%. The financial guy said the platform he would put me on did 12% last year.
Averaging 5% over how long?Both of mine are averaging 5%. The financial guy said the platform he would put me on did 12% last year.
A platform doesn t generate any return, it s the funds within a platform that define the performance and in any event 12% doesn t sound that exciting but it all depends on your risk profile.
You may need IFA advice for a DC scheme if it includes any guaranteed element or safeguarded benefits.
If as you say 2.8% is a few k’s then it isn’t an insignificant sum!!
craig1912 said:
Averaging 5% over how long?
A platform doesn t generate any return, it s the funds within a platform that define the performance and in any event 12% doesn t sound that exciting but it all depends on your risk profile.
You may need IFA advice for a DC scheme if it includes any guaranteed element or safeguarded benefits.
If as you say 2.8% is a few k s then it isn t an insignificant sum!!
The 5% is just from both last years statements, so previous 12months at 4% and 6%. My current ongoing fees are 1%.A platform doesn t generate any return, it s the funds within a platform that define the performance and in any event 12% doesn t sound that exciting but it all depends on your risk profile.
You may need IFA advice for a DC scheme if it includes any guaranteed element or safeguarded benefits.
If as you say 2.8% is a few k s then it isn t an insignificant sum!!
It’s difficult to get too specific as to what he was or wasn t guaranteeing as it was just a 30min initial consultation. The fees were fixed.
The platform was Ageon, and they would determine my risk profile at the next stage as to what and where it would be invested. It would be reviewed annually.
I don t think he isn t competent at what he does, just the transfer fee seemed toppy. Its put me off.
It sounds like a lot to me. I've transferred pensions between providers and a sipp over the years and never paid a penny either way.
As for the 0.8% ongoing that sounds expensive, but if they are going to generate massive returns it would be a bargain. You just don't know, and neither do they, but they're getting a chunk of your money so they're getting paid either way.
As for the 0.8% ongoing that sounds expensive, but if they are going to generate massive returns it would be a bargain. You just don't know, and neither do they, but they're getting a chunk of your money so they're getting paid either way.
Macneil said:
It sounds like a lot to me. I've transferred pensions between providers and a sipp over the years and never paid a penny either way.
As for the 0.8% ongoing that sounds expensive, but if they are going to generate massive returns it would be a bargain. You just don't know, and neither do they, but they're getting a chunk of your money so they're getting paid either way.
You don’t pay when you do it yourself- he is referring to IFA charges. 0.8% isn’t that expensive for ongoing advice and the IFA can’t generate massive returns, that’s the job of the fund manager.As for the 0.8% ongoing that sounds expensive, but if they are going to generate massive returns it would be a bargain. You just don't know, and neither do they, but they're getting a chunk of your money so they're getting paid either way.
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