Pension charges excessive?

Roggybear

I have a pension policy with Reassure and just revived my annual statement.
Current Pot £82500
Investment total this year £2900
Charges £978

There are, apparently, implicit and explicit charges. However I cannot find anywhere what these charges are made up of, unless I call them.

I guess I am asking are these charges excessive or fairly reasonable.

I have 25% in Choices equity and 75% in Choices managed and I have just turned 50

Thanks in advance

Roggybear

*reviewed not revived!

JoeCrystal

When was it set up? Was it through IFA or you set it up yourself? It does look a little expensive to me.

Roggybear

It was Guardian Royal back in around 1990. I suspended it for years and then started putting in again around 8 years ago

Roggybear

Was through an advisor sorry yes

JoeCrystal

It might be worth reviewing the pension pot then. Do you have any workplace pension you can transfer this into? It is also certain that it is cheaper depending on the provider and funds.

Worth finding out what are the charges made up. If it is commission to an IFA for example, you may be able to cancel it.

LHW99

If it is commission to an IFA for example, you may be able to cancel it.

But if its an older plan that may not benefit the OP, as they may still charge the same but keep the commission themselves.

NordicNoir

Roggybear wrote: »

I have a pension policy with Reassure and just revived my annual statement.
Current Pot £82500
Investment total this year £2900
Charges £978

There are, apparently, implicit and explicit charges. However I cannot find anywhere what these charges are made up of, unless I call them.

I guess I am asking are these charges excessive or fairly reasonable.

I have 25% in Choices equity and 75% in Choices managed and I have just turned 50

Thanks in advance

You can look up the detail of your exact fund here:

https://www.reassure.co.uk/fund-centre/

look up the fund and you should be able to download a pdf which will show your charges. My partner had some old pensions with Reassure and they did not charge a separate platform fee, just a fee for the funds. That said, the fee was over 1% for quite a poor fund, so we transferred the pension away from them.

Tcquins

Reassure are back book buyers with precious little administration and generally uncompetitive charges.

However, there are often transfer penalties which often make it unviable to transfer before 55 where they are reduced to 1%.

Check the difference between value and transfer value before considering moving it.

ffacoffipawb

Roggybear wrote: »

I have a pension policy with Reassure and just revived my annual statement.
Current Pot £82500
Investment total this year £2900
Charges £978

There are, apparently, implicit and explicit charges. However I cannot find anywhere what these charges are made up of, unless I call them.

I guess I am asking are these charges excessive or fairly reasonable.

I have 25% in Choices equity and 75% in Choices managed and I have just turned 50

Thanks in advance

1% annual management charge on funds is £825
5% bid offer spread (pretty standard on legacy insurance funds) on £2,900 is £145
Total is £970 which is pretty much what you have been quoted.

dunstonh

Pension charges excessive?

They dont appear excessive. You can certainly get cheaper but those appear to be 1%. The new MiFID disclosures, which dont apply to pensions yet but will do soon. So, some are already adopting it make the charge appear about 0.1-0.2% higher over the year as they take the charges over the year and apply it to the closing value. As values fell in the final quarter, you get this effect of a 1% charge appearing more like 1.2%.

If 2018 had been a growth year, a 1% charge would appear around 0.8%. It is a quirk of the way it is measured and reported.

There are, apparently, implicit and explicit charges. However I cannot find anywhere what these charges are made up of, unless I call them.

Transaction charges are implicit. You dont pay those. The fund does. However, the new EU directive requires them to be shown averaged across all investors. Product charge is explicit. Fund charge is a bit of a hybrid. You do pay that charge but it' taken within the fund. So, you only see the net effect.

Worth finding out what are the charges made up. If it is commission to an IFA for example, you may be able to cancel it.

it may cancel the renewal commission (although it is unlikely there is any on an old Reassure plan). However, it wont change the product charges.

Legacy contracts are going to have a problem showing charges in MiFIDII style. So, you are going to get some anomalies and where the charge is broken down but the end result should be ok.