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  • FIRST POST
    • £crunched
    • By £crunched 14th Sep 17, 4:53 PM
    • 4Posts
    • 0Thanks
    £crunched
    Costs of pension transfer and ongoing....
    • #1
    • 14th Sep 17, 4:53 PM
    Costs of pension transfer and ongoing.... 14th Sep 17 at 4:53 PM
    Hi there.

    Basically I'm transferring out of a DB scheme after taking lots of advice etc, what would the typical costs of transferring out and ongoing costs of running the new pension look like? I'm being quoted a lot of money at the moment.

    I just thought there are bound to be lots of folks on here going through the same thing. I'm not taking the pension for a few years yet.

    Many thanks for any input.
Page 1
  • jamesd
    • #2
    • 14th Sep 17, 5:31 PM
    • #2
    • 14th Sep 17, 5:31 PM
    Typically a few thousand for the initial advice and something like 0.5% for ongoing running but it varies very greatly by adviser and also based on the amount you're transferring and what work you want done. One practice to watch for is advisers who don't really want business of a particular type quoting silly prices to discourage prospective customers.

    You're required to get advice but you're not required to follow that advice. Ensure that the adviser you go to will provide proof of advice even if it's not to transfer and you want to proceed. Some might also insist on doing the transfer work as well as offering the initial advice. While you want both transfer and followup work you might prefer one adviser for each part. or not, up to you and what you think of those you consider.

    Shop around. Prices aren't regulated and service levels can vary a lot.

    For an introduction to taking an income from a defined contribution pension pot have a read of Drawdown: safe withdrawal rates. You have far more flexibility in when you take income and how much you take and unlike a defined benefit pension it's easy to take more income from the pension until your state pension starts then less later, instead of having to take the same amount the whole time and having it cut if you start it early. If that is your need ensure that you tell the adviser because it's one of the key reasons that can make a transfer a good move.
    • xylophone
    • By xylophone 14th Sep 17, 6:02 PM
    • 22,881 Posts
    • 13,243 Thanks
    xylophone
    • #3
    • 14th Sep 17, 6:02 PM
    • #3
    • 14th Sep 17, 6:02 PM
    http://forums.moneysavingexpert.com/showthread.php?p=73120599#post73120599

    post 3.

    And remember that not all schemes will accept a transfer in without a positive recommendation.
    • £crunched
    • By £crunched 14th Sep 17, 9:00 PM
    • 4 Posts
    • 0 Thanks
    £crunched
    • #4
    • 14th Sep 17, 9:00 PM
    • #4
    • 14th Sep 17, 9:00 PM
    Many thanks to you both.

    I'm particularly interested in what percentage people are being charged at the start to do the transfer and what the ongoing costs should be.
    • sandsy
    • By sandsy 15th Sep 17, 9:07 AM
    • 1,177 Posts
    • 680 Thanks
    sandsy
    • #5
    • 15th Sep 17, 9:07 AM
    • #5
    • 15th Sep 17, 9:07 AM
    A fair price would be around £2k-£3k for the actual transfer advice. Percentages charges will result in higher prices for a large pot and unless capped, is unlikely to be good value.

    Typical ongoing advisory costs are 0.5%-1% of funds under management. Again, I'd be looking for some cap on the amount for larger pots. A fair price might be from £500-£1500pa. If you go into drawdown and receive advice for 30 years, albeit on a fund which is going down as you draw income from it, it adds up to a lot of money. So do consider carefully what you are looking for in terms on ongoing servicing, what is being offered and whether the proposition appears to be a fair basis for establishing a trusting ongoing relationship with the adviser.
    • ianthy
    • By ianthy 15th Sep 17, 5:31 PM
    • 83 Posts
    • 39 Thanks
    ianthy
    • #6
    • 15th Sep 17, 5:31 PM
    • #6
    • 15th Sep 17, 5:31 PM
    I transferred my DB funds a few months ago £937k and paid £2k for the transfer process. Plus £4k to set up the SIPP/funds and advice. I have split my pot £450k under mgt @ .80% and £300k managed by myself. I did a lot of research on costs for the transfer and like many have said they varied wildly.
    • £crunched
    • By £crunched 15th Sep 17, 6:42 PM
    • 4 Posts
    • 0 Thanks
    £crunched
    • #7
    • 15th Sep 17, 6:42 PM
    • #7
    • 15th Sep 17, 6:42 PM
    Wow, will no cap has been mentioned and it's going to add up to a nice sum for the IFA! I think I need to shop around a bit more, is there a register of qualified advisors anyone can point me towards where I can find a local one to compare costs?
    • RADDERS
    • By RADDERS 15th Sep 17, 7:14 PM
    • 147 Posts
    • 131 Thanks
    RADDERS
    • #8
    • 15th Sep 17, 7:14 PM
    • #8
    • 15th Sep 17, 7:14 PM
    There is unbiased.com but you have to be really careful as a couple of IFA's that I contacted did not have the permissions to do the transfer but passed that onto another company. Yet when I asked if they had the permissions they were adamant that they had.

    In the end I rang around some local IFA's and asked the question and reiterated that I was only interested if they had the required permissions, it was a bit of a slog but I got there in the end.
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