Aegon Pension Charges brought me here

chickenfeed

I put £876 in my pension each year
Aegon take out £951 in charges!!!!!!

In brief:

• I have a personal pension since 1989 (age 22) when I was- employed
• It's with Scottish Equitable - Now Aegon I believe
• I believe it was suggested I opt out of SERPS (which I have done).
• I got made redundant 2001, so I dropped the monthly contributions to the lowest they could be.
• I have been self employed since approx since around 2003
• I have gradually increased the contributions each year.
• The actual amount that leaves my bank account each month is £73
• I am 52 this year
• My net profit averages around £25

The pension company send me a statement each year and I can see the fund growing. Currently approx £80k.

On the latest statement 2019, I can see their charges in pounds and pence!, I also see 2018 statement had the charges detailed too, around the same time it switched to PaperLess, so I missed it. All Previous paper statements do NOT show the charges.

I believe the LAW changed around Jan 2018, which made them have to show the charges, but I could be wrong.

I have no idea about pensions!. I thought I was doing a good thing by getting one early in my working life.

Now I feel ripped off with the charges. When I called Aegon, the lady said the charges where made up of £831 (1% annual fund charge) + £120 (Premium Charge). I asked her if she had heard of "Martin Lewis", :money: and she had, so that's good. I do admire him.

So the reason for posting, is to get a bit of advice. What to do?
I do like the idea of "Tracker" funds, with low charges. I have no idea if the fund can be moved/transferred. I imagine that aegon would want to charge some amount of money to leave them!

Any help / suggestions most welcome.

Thanks

dunstonh

I put £876 in my pension each year
Aegon take out £951 in charges!!!!!!

And if you paid nothing in they would take the charges.

The pension company send me a statement each year and I can see the fund growing. Currently approx £80k.

So, the charges are not too bad. Especially for a 1989 product.

I believe the LAW changed around Jan 2018, which made them have to show the charges, but I could be wrong.

No law change.

Now I feel ripped off with the charges.

I think it is more to do with you not understanding than the charge itself. Indeed, you pay higher charges on your savings account at the bank.

There is no rip off here.

I do like the idea of "Tracker" funds, with low charges.

Before you start changing things to include advanced investment options you need to up your knowledge. And whilst you will save money, it will not be as much as you think. e.g. HL at 0.45% plus OCF of 0.15% is 0.70%. You are paying 1.00%.

Charges are not against your contribution. They are against your value

Albermarle

1% seems to be typical for a workplace type pension set up quite a few years ago. Sometimes if you are lucky the employer will have negotiated a discount when it was set up .
If you really go for the lowest cost SIPP and the lowest charge tracker fund you can get the cost below 0.5%. But if you go for a mid price provider and a lower risk multi asset fund rather than a higher risk tracker then it will still be less than 1% total but not by that much.
So probably best not to rush into anything .

Dox

chickenfeed wrote: »

I put £876 in my pension each year
Aegon take out £951 in charges!!!!!!

Any help / suggestions most welcome.

The amount you contribute has nothing to do with how charges are worked out in the type of scheme you are in. Charges are based on the total fund value, plus a monthly charge (the premium charge of £10 a month, in your case) because it's a very old style pension contract.

Best suggestion is the one made earlier in this thread: learn some more about your pension before deciding you are being ripped off -and cut down on the use of exclamation marks.