Pension transfer - Clear steps and charges please

oslamp

Hi

I have the legacy of a couple of company pensions schemes. I am now a contractor. I have contacted IFA and looking through the assessments it looks as though I could be charged thousands for advice based on putting my penison into another scheme. I am at a loss. I want the following

1.) Setup of new pension (best option in my position i.e. are SIPPS good?)
2.) Transfer of existing penison to new scheme
3.) Clear details of my fund value and funds.

A fixed fee for this service. I understand there may be a yearly management fee.

for arguments sake on a current value of £20k how much should I be charged for this service?

Regards

dunstonh

1.) Setup of new pension (best option in my position i.e. are SIPPS good?)

SIPPs are good but so are stakeholders and personal pensions depending on what you needs are. SIPPs could be the best option or the worst.

2.) Transfer of existing penison to new scheme

Is that advisable? Are the old schemes final salary or money purchase?

3.) Clear details of my fund value and funds.

All modern pensions do this so thats not a problem.

for arguments sake on a current value of £20k how much should I be charged for this service?

Its a small fund value but the work level is much the same upto around £100k. If the schemes are money purchase/group personal pensions then £500 if fee based. If final salary then you could be looking in the thousands and probably told to leave them were they are.

Its difficult to give you any idea of cost because IFAs are retailers and like any retailer, their prices are different. Some cheap, some expensive and a load in between.

oslamp

Hello dunstonh

Thanks for your speed response and your points are useful. I was on a group personal pension scheme. I will locate an IFA and take it from there. For me I want the simplicity to take a lump sum when I retire - 30 odd years and a clear amount each month. Nothing tied to other assets.

The type of pension is the issue and I hope I get the correct advice on this. I am a contractor (limited company) setup currently so I want to make the right choice in the tyep of pension to transfer into.

Regards

dunstonh

If it goes to into a SIPP, aim for a commission/remuneration level (as SIPPs have commission and fees equal) of 1.8% initial or lower. If it goes into a personal pension, aim for the annual management charge to be around 1.5% or lower. They should be your bencharks for value.

oslamp

Thanks a lot for your input. Much appreciated.

EdInvestor

oslamp wrote: »

I want the simplicity to take a lump sum when I retire

You realise that you can't take capital out of a pension - other than the 25% tax free cash?

If you want access to the money as a lump sum at retirment you need a stocks and shares ISA, not a pension.