New Role, New Pension, High Charges

Albermarle

someone said:

Anyway my understanding that auto enrolment brought charges down for NEW business as there was lots of shopping around happening by employers. Given scenarios like the one detailed below charges for OLD business did not reduce. Case in point Peoples Pension (provided by B&CE) for auto enrolment charges £2.50 /year + 0.5% - [rebate up to 0.3% on pots >£50k].

My Workplace Pension is Scottish Widows. Interestingly it was selected whilst the company was much larger and a plc. We have been though acquisitions, downsizing and pre pack administration. Now as an SME (on the smaller side no less) the people who set the original scheme up long gone. Post administration an incredible amount of effort had to be made just to keep payments going into the scheme (as well as the deductions pre-administration that hadn't yet been applied to employees accounts).

With my Workplace Pension the standard offering (Scottish Widows Pension Portfolio Two Pension) has a Total Annual Fund Charge of 1.00% less employer discount of 0.25% (so 0.75%). Personally I find this to be high however the Telegraph seems to say this is better than most

An annual charge of 1–2% should be considered expensive. Unfortunately, nearly half of UK savers (49%) have annual pension charges of over 1%[4]. https://www.telegraph.co.uk/financial-services/pensions-advice-service/pension-charges/

An employer discount of 0.25% is not great, and is pretty much what you get yourself if you have £50K or more in some of these these types of pensions . 

zagfles

someone said:

Anyway my understanding that auto enrolment brought charges down for NEW business as there was lots of shopping around happening by employers. Given scenarios like the one detailed below charges for OLD business did not reduce. Case in point Peoples Pension (provided by B&CE) for auto enrolment charges £2.50 /year + 0.5% - [rebate up to 0.3% on pots >£50k].

My Workplace Pension is Scottish Widows. Interestingly it was selected whilst the company was much larger and a plc. We have been though acquisitions, downsizing and pre pack administration. Now as an SME (on the smaller side no less) the people who set the original scheme up long gone. Post administration an incredible amount of effort had to be made just to keep payments going into the scheme (as well as the deductions pre-administration that hadn't yet been applied to employees accounts).

With my Workplace Pension the standard offering (Scottish Widows Pension Portfolio Two Pension) has a Total Annual Fund Charge of 1.00% less employer discount of 0.25% (so 0.75%). Personally I find this to be high however the Telegraph seems to say this is better than most

An annual charge of 1–2% should be considered expensive. Unfortunately, nearly half of UK savers (49%) have annual pension charges of over 1%[4]. https://www.telegraph.co.uk/financial-services/pensions-advice-service/pension-charges/

Looks like that's for personal pensions. Workplace pensions are capped at 0.75% for the default strategy