Pension Management Charges

boybeck

I have recently changed my job and my legal and general personal pension plan will come with me.In 6 months time I can take out another pension with my new company that will contribute 6% of my salary plus personal contributions if i so wish. I dont intend at present to top up my L and G plan,the extra money at present will come in handy for DIY,L and G wrote to me the other day to advise me that i could still contribute into the pension which is fine,but they will still levy the monthy management charges each month thus in effect reducing my pot of money.My question is can I change the pension to be run through a broker hopefully reducing the monthy management charges

dunstonh

but they will still levy the monthy management charges each month thus in effect reducing my pot of money.

Thats not what it means. L&G invest the money and you are paying the investment charges. If the investment goes up 8% you lose around 0.8% in charges.

My question is can I change the pension to be run through a broker hopefully reducing the monthy management charges

Would make little or no difference. If you went with active management then the charges are likely to be a little higher as L&G are usually quite cheap but you wouldnt use them for active portfolios. You use them for people that want just to invest and forget (which is never a good move but some, possibly many, do that).

EdInvestor

You could move it to a SIPP at a discount broker eg

https://www.h-l.co.uk

You will still pay an annual charge on whatver funds you invest in, but there is no charge for the SIPP wrapper itself. The best funds normlally cost in the 1-1.5% range.

What is L&G charging (and what funds is the pension invested in)?

boybeck

1.5% below 50K and .5% above 50K stiil seems a lot to me in terms of the money they take each month for administration.At least the funds are doing well at the moment ie Distribution,property and managed.

dunstonh

A SIPP with HL will be more expensive than most L&G contracts. L&G's annual managment charge on an IFA contract with full commission will be around 0.7%-0.9% a year. HL's SIPP will typically be around 1.5%.

Only on small values do L&G charge 1.5%.

boybeck

Thanks for the info