Subject for the next RECLAIM campaign??

Laughingbear

I opted out of a company pension scheme in 1989 when I left the company I'd worked for since 1983. My pension was frozen for a few years until I decided to transfer the funds into a portable pension scheme (this would be more suitable for my career path). After all the poor press regarding pensions and their high charges, I decided that I'd prefer to make my own investments for my retirement years in the form of ISA's, Premium Bonds and Shares.

The problem I have is with the frozen pension. The company holding the fund are taking an annual charge for more or less doing nothing! Each year, my fund has management charges taken from it and there appears to be little or nothing I can do about this. I don't understand how a 3rd party (the fund management company) can take more out of my pension pot than I can!!

I'd like the views of others on this and if you think there could be a way for us all to reclaim these unfair charges that have been levied on pensions by companies that do virtually nothing for us and our pension funds!

EdInvestor

Laughingbear wrote: »

The problem I have is with the frozen pension. The company holding the fund are taking an annual charge for more or less doing nothing!Each year, my fund has management charges taken from it and there appears to be little or nothing I can do about this. I don't understand how a 3rd party (the fund management company) can take more out of my pension pot than I can!!

Could you perhaps explain a bit more. Is your pension at an insurance company?What funds is it invested in?What charges are you paying and to whom?

It is of course normal to pay some charges, insurers and fund managers don't work for nothing.The question is are you getting value for money.

dunstonh

The company holding the fund are taking an annual charge for more or less doing nothing! Each year, my fund has management charges taken from it and there appears to be little or nothing I can do about this. I don't understand how a 3rd party (the fund management company) can take more out of my pension pot than I can!!

The 0.5-1.5% (typical) pays the fund managers to invest your money and continue admin. Who is going to pay for the investment team and the regulatory requirements and admin on your pension if you dont?

After all the poor press regarding pensions and their high charges, I decided that I'd prefer to make my own investments for my retirement years in the form of ISA's, Premium Bonds and Shares.

And you made a financial decision based on media articles that almost certainly have nothing similar to your sitation apart from the term "pension"?

A pension is just a tax wrapper. Exactly the same as an ISA. If you place the same investment inside the pension or the ISA, the return will be identical. The only difference is the way the maturity/surrender is paid. Premium bonds are just a lottery and retirement planning using those is wasteful.

Charges could impact on the returns but seeing as pensions can actually have the lowest charges of any tax wrapper, your arguement doesnt carry any strength.