Is there any point staying in ex company pensions?

carpy

hi,
is there any point to staying in ex company pensions?
i have 4 pots none of which i'm contributing to. would i be better off moving them all or some into a SIPP where it seems the fees would be lower?
pot 1 - aviva (with profits) - annual charge £35
pot 2 - scottish widows - 0.39%
pot 3 - clerical medical - 1.15%
pot 4 - aviva - 0.97%

my thinking is along the lines that i should keep the aviva (with profits) due to the very low annual charge but i'm certain i could benefit from moving the others to a low cost SIPP somewhere?
i don't believe any have any transfer out cost so nothing to lose......??

Albermarle

but i'm certain i could benefit from moving the others to a low cost SIPP somewhere?

Nothing is ever certain.....

First you need to double check that there are no discounts you are not aware of. I only found out by accident that one of my ex employer pensions had a 0.55% discount . There was no indication in any of the paperwork at all ..

Second - No point taking out a low cost SIPP and then putting the money into high cost funds .They all have their own 'multi manager' ' Portfolio funds ' etc that are heavily promoted and expensive ! So best to be clear in advance what you want to invest in first.

MaxiRobriguez

There's two things to consider:
1) The cost of the platform/fund fees in the old pensions compared to the cost of the platform/fund fees on what you plan to move it to. If your old pension gives a cheaper overall cost, why move it?
2) The additional time spent "managing" five different portfolios. For example if consolidating into one costs you an additional £5 a year in fees, then you might think it's worth it as it gives you a few hours back in the year to do something else.

dunstonh

pot 1 - aviva (with profits) - annual charge £35

pot 2 - scottish widows - 0.39%

pot 3 - clerical medical - 1.15%

pot 4 - aviva - 0.97%

Are those the actual confirmed charges or the factsheet charges?

Aviva and Clerical Medical both do fund based discounts from their default charge and both had contracts that could be set up on special terms.   Most CM plans arranged after 2001 only went above 1% if you used external funds. Same for Aviva

carpy

@dunstonh
the CM is the standard AMC minus 0.1% for the fund being >£10k
the SW is a discounted rate (negotiated by my former employer)
Aviva i think is a discounted fee (i think their standard fee is 1%) at 0.75% + the extra % is for one the 2 funds i'm in.
thanks

atush

Generally speaking you look at both current charges, and funds available, and charges for the funds you want.

Balance this, with any older funds/pensions w/p or not that have any guarantees (some come with special annuity rates well above market)

AnotherJoe

carpy said:

hi,
is there any point to staying in ex company pensions?
i have 4 pots none of which i'm contributing to. would i be better off moving them all or some into a SIPP where it seems the fees would be lower?
pot 1 - aviva (with profits) - annual charge £35
pot 2 - scottish widows - 0.39%
pot 3 - clerical medical - 1.15%
pot 4 - aviva - 0.97%

my thinking is along the lines that i should keep the aviva (with profits) due to the very low annual charge but i'm certain i could benefit from moving the others to a low cost SIPP somewhere?
i don't believe any have any transfer out cost so nothing to lose......??

The phrase is "dont let the tax tail wag the dog".

Yes, the Aviva may have a low charge, but then again whats its performance been like? Maybe its dire? (Or maybe its OK, I dont know)

As for the others, well you need to check all the charges for example there are possibly fund charges to be added on top as well.

In your case, whilst i know "past performance is no guide..." etc, thats all you've got to go on so have  a look at what their performance has been like and compare that with the funds you'd choose in a SIPP.  I dont usually read good thinsg about SW or with profits plans in these forums for example.

One reason to consolidate is just to make it easier, for exampel each time you move jobs, move pension into your chosen SIPP,and at the same time stay in new employers scheme.

gm0

Here is one last thing not to forget in the comparison once costs and asset allocation choice have been considered

This is the "insured" or not status of the pots in terms of regulatory protection.  A sipp isn't (85k).  Many existing occupational are 100%.  Complex area.  Don't pretend to understand all the life company and trust law. 

This protection difference has a small but non-zero value. Only you can decide when asset allocation choice and cost deltas or operational convenience make the move clearly worthwhile.  In saving or in deaccumulation. 
For a "like for like" underlying asset allocation investment performance won't be a real argument.  But fund choice to achieve a desired diversification and allocation and the fund and platform costs will be. 

Some people with an interest in you moving tend to skip over this factor but then - "they would say that". It doesn't fit a narrative where they make any money off you.  A decent IFA would present the facts/highlight the tradeoff when recommending consolidation.

I (unadvised) have this exact conundrum.  Limited fund choice but a cheap scheme. Zero now + global equities fund @ 0.07%. 
Will likely be 0.1% + 0.07% in current fund in drawdown (i.e. heavily discounted).  Scheme changing later in the year.  Awaiting news on what that means.  Insured.  This is versus a choice of SIPPs per forum spreadsheet. 
Clearly loads more choice of investment (at all prices) - but not (in my case) cheaper and not insured. 
As it's a "one time one way door" out to the SIPP can't go back.  Thus need to think before stepping through it.

Brynsam

gm0 said:

Here is one last thing not to forget in the comparison once costs and asset allocation choice have been considered

...and five other things: https://www.royallondon.com/media/press-releases/2019/august/five-good-reasons-to-think-twice-before-consolidating-your-pension-pots/

hyperhypo

Also one other thing to consider possibly...that your choice of investments may be restricted in current scheme. For example, i had assumed that i might buy Investment Trusts as part of my move to drawdown. This isn't possible with my ex company sipp (Aegon ARC) in drawdown without advice, but would be available to self select on uncrystallised funds. So i'm considering now moving away from  Aegon as no more contributions will be made from ex Employer, to someplace that does permit this ,  and which treats crystallised and uncrystallised funds as separate entities. I'm less concerned with platform fee discounts (0.3%) than having flexibility...and how drawdown managed generally.

carpy

hyperhypo said:

Also one other thing to consider possibly...that your choice of investments may be restricted in current scheme. For example, i had assumed that i might buy Investment Trusts as part of my move to drawdown. This isn't possible with my ex company sipp (Aegon ARC) in drawdown without advice, but would be available to self select on uncrystallised funds. So i'm considering now moving away from  Aegon as no more contributions will be made from ex Employer, to someplace that does permit this ,  and which treats crystallised and uncrystallised funds as separate entities. I'm less concerned with platform fee discounts (0.3%) than having flexibility...and how drawdown managed generally.

yep...that's coming into my thinking too...where is going to be best/easiest/cheapest for drawdown.