Pension on going fee or hourly rate?

1971graeme

I am 46 and have 3 separate pensions. Bank 5 years service, Army 10 years service and Royal Mail 11 years service and currently still paying into it. I took out a private pension last year with IFA advice (Royal London) paying in £16k nett and am planning to continue paying this lump sum amount in for the next 10 to 15 years. I also fully subscribe to ISA's every year.

Royal London charges p.a. are currently 0.90% but will decrease to 0.50% with next installment and I pay my financial adviser 0.50% of the plan value built up. I am happy with everything I have received so far but other than advising on product not sure what the on going fees will be paying for.

Obviously over the next years my financial adviser charges will be going up so considering with future payments paying in myself and if I require pension financial advice paying for this as and when required.

The pension was selected for this long term plan and with Royal London charges and adviser charges i'm not sure which way best to proceed.

Meeting my FA next week and looking for any advice on this question.

Thanks

dunstonh

am happy with everything I have received so far but other than advising on product not sure what the on going fees will be paying for.

Typically, that will include ongoing reviews of the product/investments, doing the top ups with no additional charges etc.

You can cancel the ongoing service at any time. However, Royal London are a provider that uses intermediaries. If you didnt plan adding to it or needing any other tasks you would probably get away without ongoing servicing. However, if you plan to keep adding ad-hoc lump sums you need to transfer the pension to a DIY provider. That may not save you as much money as you think. For example, the popular option of HL charges 0.45% for the platform charge and investment charges on top of that. With your contribution, you should be in the 0.45% range with RL within a couple of years and that includes the fund charges.

xylophone

Had you considered the Royal Mail AVC?

http://www.royalmailpensionplan.co.uk/sites/default/files/documents/rm_avc_booklet_01.06.11_0.pdf

Had you considered transferring to a SIPP and managing your investments yourself?

1971graeme

Thanks for the replies. The Royal mail pension scheme is going through some changes just now with scheme closing in 2018 and a new one not confirmed as yet so going to stay away from the AVC's.

Will discuss more with my FA next week.