Confused and need help

lala77

Posting for advice as very confused about options and feeling like I don’t have enough knowledge to make the right decision here.

I have 5 legacy workplace pensions current pot value of £100k. I’m 41. I want to consolidate these and then reinvest as currently all in default funds.

I’ve spoken to a financial advisor but have also seen Pension Bee which offers the service for a lot less. The IFA has quoted £3k setup with ongoing charge of 2% a year. In comparison Pension Bee has no set up costs and charges less than 1% a year. I’m feeling very confused. Any advice welcome.

xylophone

https://www.cavendishonline.co.uk/pensions/

https://monevator.com/category/investing/passive-investing-investing/

AnotherJoe

Charging less than 1% a year is not a recommendation. You might as well mention a 0-60 time of under 30 seconds as reason for buying a car. Hargreaves s Lansdown is frequently slated here as being expensive and it's at most 0.45% (plus investment charges).
What are the rates on the existing pensions? Is there a low one you could move the others to? You say they are invested in "default funds" well what about non default funds? What choices do you have in some if them that are better.
I know nothing of Pension Bee but having read a lot here I'd be confident there are others at least as good and probabiy better. And by "good" I mean lower cost wider range of funds. Their tracker for example which I've just hada look at is 40% U.K. which is I suggest poor because it means it's invested in a skewed handful of sectors,
From what I can see PB focuses mostly on consolidation but that's sometning you can DIY better at lower cost if none if your current pensions already meet that criteria, something you may not have looked into?

lala77

Thank you.

I’m really coming at this with no knowledge. I’ve accrued these workplace pensions without putting any thought into it but now after recently starting a 6th I just feel the situation is getting so ridiculous and I need to do something but I don’t know what!

AnotherJoe

Start by noting for each pension, what its charges are and what investment choices there are. Maybe one of those will be better than PB?

Also check there are no guarantees associated with them some may have valuable guarantees such as minimum payouts, which will be lost if you move them.
Then look at what investment choices you'd like to have (the PB ones looked poor to me at a quick glance) then choose a pension that provides those.
Youve started on the last step, choose a pension

xylophone

after recently starting a 6th

Had you considered transferring the old pensions into your current pension?

atush

lala77 wrote: »

Posting for advice as very confused about options and feeling like I don’t have enough knowledge to make the right decision here.

I have 5 legacy workplace pensions current pot value of £100k. I’m 41. I want to consolidate these and then reinvest as currently all in default funds.

I’ve spoken to a financial advisor but have also seen Pension Bee which offers the service for a lot less. The IFA has quoted £3k setup with ongoing charge of 2% a year. In comparison Pension Bee has no set up costs and charges less than 1% a year. I’m feeling very confused. Any advice welcome.

2% ongoing is FAR too high. Expect around .5%, mayb 1% max.

The initial, given there are 5 pensions is in the acceptible arena. For one, it wouldnt be.

lala77

Thank you all.

I think I am going to talk to some other brokers. I don’t feel confident doing anything myself but it looks like the quote I have is on the high side.

bostonerimus

I don't know about the one time fee for the consolidation, but 2% on going is a rip off. If you do this make sure you employ an IFA and see if you can DIY the investments after than and save yourself 0.5% to 1% a year which is the most you should pay for ongoing service.

As a comparison the situation in the US seems to be a lot simpler. You can usually consolidate old defined contribution plans into your new employer's plan or put them all into an Individual Retirement Account (IRA) held at a bank or fund platform. I've done this several times and the cost was absolutely nothing. I just needed to send a simple form to the old defined contribution pension administrator telling them where to send the money and another form to the new administrator.

mgdavid

lala77 wrote: »

Thank you all.

I think I am going to talk to some other brokers. .......

Not brokers, but Financial Advisers - and do make sure they are Independent FAs, IFAs.