Will I recoup my "exit" fee with another pension provider?

carol428

I have a pension with St James Place worth c.£130,000 which I would like to transfer, mainly due because of the high charges and lack of transparency of SJP. The "exit" fee - they call it an early withdrawal charge - is 1%, so I will be charged £1300 to move the pension. I am aged 55 and anticipate not withdrawing my pension for c. another 8 years. Does it make financial sense to move the pension to either Scottish Widows (with whom I have a workplace pension) or BestInvest (with whom I have just opened a SIPP) now or just stick with SJP? I know that it is impossible to predict how the other two pensions will perform over the next 8 years, but am I likely to recoup the £1300 overall?

Thanks for the advice.

xylophone

https://www.bestinvest.co.uk/our-service/transfer

We will pay you up to £500
We will pay up to £500 towards any exit fees your current providers charge when you transfer your investments to Bestinvest.*

Would you be eligible? It would lessen the pain?

Alexland

Alternatively for your account valuation Fidelity are offering both £250 cashback and to cover up to £500 in exit fees.

https://www.fidelity.co.uk/pension-transfer/#cashback-offer

Fidelity's SIPP is particularly attractive if holding ETFs as their ongoing charge is capped at £45 (under 0.04% of your £130k account valuation).

Alex

Paul_Herring

Another way to look at it is, given the charges, would it cost you more than £1,800 if you stayed with SJP?

carol428

Thank you for your reply Xylophone; you have raised an interesting point, as I was hoping that the SIPP which I have just opened with BestInvest would qualify for that offer. It turns out that BestInvest are now haggling over this offer, as they claim that I have "withdrawn" funds from SJP (I have already transferred £50,000 from the SJP pension to BestInvest) and this "exit" fee is not a transfer fee - which is leaving a rather bad taste in my mouth.

Alexland

If you have £50k with BestInvest and £130k with SJP and you transfered both to Fidelity that would be worth £500 cashback and possibly £500 in exit fees. If investing in ETFs the £45 platform fee would be 0.025% of £180k.

xylophone

and this "exit" fee is not a transfer fee - which is leaving a rather bad taste in my mouth.

Make a formal complaint?

sandsy

SJP's early withdrawal charges last for 6 years after each contribution. Might be better waiting until you reach the end of this period.

dunstonh

This is where software helps. However, we did one recently that was within the 6 year period and transferred out as what we put the person in costed 0.34% p.a. and delaying for the extra years still meant paying the 1.9% (or whatever it was). So the breakeven point made it worthwhile. You will need to look at your costs to work that out for you.