pension charges questions

valkyrie

I recently started a new job with a small company that provides a pension plan via what looks like a private pension through an independent advisor. The company contributes 10%, which seems quite generous. Apparently I get to decide where my money goes but products from scottish widows are being recommended. The lowest charge is 1%, and it seems like quite a lot, especially as that is 1% of the actual pension pot, not 1% of the annual contribution. Is that a reasonable charge or should I ask to look at other providers?

dunstonh

The lowest charge is 1%, and it seems like quite a lot, especially as that is 1% of the actual pension pot, not 1% of the annual contribution.

Why do you think 1% is a lot?

Lets say your pension pot is £1000. That means the adviser (retailer in this case), the packager (SW) and the fund manager have £10 to share between them.

Is that a reasonable charge or should I ask to look at other providers?

1% has been the benchmark charge since 2001. Yes you can get cheaper but only from a couple of providers who have other charges that could see it being more expensive.

valkyrie

Sorry for my ingnorance, I just thought it seemed a lot because the next year you will pay 10 quid on the extra £1000 and another 10 quid on the £1000 already in there. But if 1% is a normal charge then I'm happy to go with it. thanks for the advice.