How good/bad do you think my current pension is?!

simonp

Would appreciate any comments on how good or bad my current pension is with Legal and General (about to be transferred to ReAssure whatever that is! I've had it since 2006 and have never made any changes to it. My company currently pays in £300 a month and I appear to be paying around a third of that each month as a management charge. I'm a single guy, currently 46 and was planning to retire at 60. I have some other savings, regular income and am mortgage-free so don't need a lot to retire on (but probably more than this is currently worth!)

I know I need to up my monthly contributions to get more out of it but just wondering how this looks ie how bad are the fees compared to something like PensionBee.

Any advice welcome!

barnstar2077

Holy smokes, those are some charges!  Why are they so high?

garmeg

barnstar2077 said:

Holy smokes, those are some charges!  Why are they so high?

Just over 1% pa so not that bad.

Not sure why they have a 'Life' fund in a pension contract though - maybe this makes no difference nowadays?

barnstar2077

It still still seems high to me, unless they are providing regular advice as well.  The fund charges seem very reasonable though.

simonp

barnstar2077 said:

It still still seems high to me, unless they are providing regular advice as well.  The fund charges seem very reasonable though.

I get nothing from them for this! Not that I'm aware of anyway. It was setup by my old accountants a long time ago. Until this year it *seemed* to be performing really well - I assume the large loss is due to covid.

Is 1% a year pretty average then?

garmeg

simonp said:

barnstar2077 said:

It still still seems high to me, unless they are providing regular advice as well.  The fund charges seem very reasonable though.

I get nothing from them for this! Not that I'm aware of anyway. It was setup by my old accountants a long time ago. Until this year it *seemed* to be performing really well - I assume the large loss is due to covid.

Is 1% a year pretty average then?

It is a bit on the high side but not excessively so. You would pay more than double that at St James Place with a huge penalty to move away in the first six years.

You could probably get down to 0.5% with other providers.

Not sure where the 1% charge goes to because both funds have a charge of 0.15% according to your statement.

Have you got an annual statement with all the ins and outs instead of that year end summary?

Albermarle

Many years ago 1% would have been cheap, but nowadays is on the higher side but not ridiculously so . For this type of personal pension with a well known name , or with a newer provider like Pension Bee etc  something around 0.8% to 1 % would be  typical for a £100k pot .
However it is a competitive market and more canny investors would be looking to pay less by putting more effort in research and using the latest available products .
The' large loss ' is due to Covid but the valuation ( in April) is now way out of date . As markets have recovered well, an up to date valuation ( on line ?) would look much better I am sure .
£100K is not that much in pension terms so upping your contributions would be a good idea in any case . Do not let the pension projections put you off, they tend to be very pessimistic . Although it is true you do need a largish sum to produce any kind of decent income in retirement.

barnstar2077

Even a bog standard personal pension with Aviva charge half of that.  Hargreaves Lansdown charge 0.45%, with Vanguard only 0.15% if you wanted to go DIY.

simonp

Yep the value today is around £120K so is definitely recovering from covid somewhat.
Below shows my monthly transactions. Is 'management charge' the same as the 1% you're talking about above?
Thanks everyone - I'm learning so much already!

garmeg

simonp said:

Yep the value today is around £120K so is definitely recovering from covid somewhat.
Below shows my monthly transactions. Is 'management charge' the same as the 1% you're talking about above?
Thanks everyone - I'm learning so much already!

Yes that is the 1%pa charge, deducted monthly. There is also the fund charges of 0.15%pa which is allowed for in the unit prices.

You could get cheaper elsewhere but if you are not sure about what to invest in I would be minded to leave well alone at this stage

Black_Cat2

Wow, quite depressing on how little a large pension pot can get you over a year. 

My pension is £40K in total (still a few years left to bump it up a bit). 

No way of getting around it... I might have to consider selling my cat when I retire 😉