Pension charges

Treehugger1

I have had a personal pension with the same well known pension and investment provider for over 15 years and it was set up to amalgamate all my little pensions from various employers in one place. I have not made any regular payments in that time. My financial advisor has disappeared so I have been managing it myself and in contact with the pension provider at least 6 or more times a year looking at my funds/options and reading updates on line as I’d like to think I’m aware of what’s going on. Anyway, I am about to start taking the pension and I was talking to the pension provider team and they told me that if I had transferred to one of their new pensions (in fact I have found out it’s over 12 years new) I would have saved on the annual management by way of a discount around £700 this year alone. I asked the pensions team why I was not made aware of this as it is not mentioned in any literature, online or otherwise. I was told it is not their responsibility to do so. I believe in this age of transparency and treating customers fairly they should have. I’m talking of around £10,000 plus of fees I would have saved which if not deducted from my pension would have grown even more to provide a larger income for me. I would like to know what you think, should I take this further or am I wasting my time.

dunstonh

Anyway, I am about to start taking the pension and I was talking to the pension provider team and they told me that if I had transferred to one of their new pensions (in fact I have found out it’s over 12 years new) I would have saved on the annual management by way of a discount around £700 this year alone. 

That is not a surprise.  Pension costs have been falling nearly every year for the last 30 years.    Some old plans are gems worth keeping but many are priced higher than modern plans.

it is likely that the product offered today is cheaper than the one offered 12 years ago, let alone over 15 years ago.  For example, the Retail distribution review came into effect in January 2013 and most providers issued a new version with that.

Investment platforms get most of the individual business nowadays and they dont tend have product versions. They have one version and everything gets it and with most, they get the same pricing or lower.  If they reprice, it tends to apply to everyone.

 I asked the pensions team why I was not made aware of this as it is not mentioned in any literature, online or otherwise. I was told it is not their responsibility to do so.

Providers are not responsible for your research.  They are not allowed to make recommendations unless they employ advisers (most don't).  You would be asking them to do something that they are not allowed to do from a regulatory point of view.

I believe in this age of transparency and treating customers fairly they should have.

You are wrong.  You are expecting them to do something outside of their remit.

I would like to know what you think, should I take this further or am I wasting my time.

You are wasting your time.    If you employed a financial adviser on an ongoing basis then you could have a case.  They would be responsible.  However, you didn't use an adviser after the initial one ceased.  You took on the responsibility of ongoing servicing yourself on a DIY basis.       It was your responsibility to carry out due diligence and research.  

ex-pat_scot

Does your bank contact you to tell you that your savings rate is no longer market-leading?
DOes your broadband provider or telephone provider or utility provider routinely let you know that you are not on their best deal?

Some are gradually being forced to take small steps towards TCF by the regulator - for example "price walking" for motor and home insurance.

Generally, customer inertia is the place where a company makes its money.
Your pension provider has a duty of care to provide you with transparent fees and costs information; not to switch you to its cheapest product or to meet the best price of its market competitors.

Albermarle

If you have a relatively large fund and kick up a fuss with your current provider , whilst dropping some hints about transferring your pension out to another provider altogether . Then maybe they will make you a goodwill gesture , but it would be nothing like the figure you mentioned .

Like Dunstonh said a modern day mainstream SIPP provider will have a clear list of charges on their website that apply to everybody ( sometimes with discounts for bigger funds /certain investments ) although even these can be a bit complicated.

If you are with a traditional provider , like Aviva, Standard Life , Scottish Widows , it all depends on the pension product that was  available when the pension was started and the original charging structure ( which can be less than clear) continues to apply.
I can sympathise with your frustration but not a lot can be done about it .