Pension Fees

stryker2001

Good afternoon everyone. Just a little query on contributions and fees that im paying. Im 52 and have been paying small amounts into my private pension since i was 18. Moved pensions from one company to another with advice from a financial advisor. Now my advisor has retired and moved my pension and is now run by a company called True Potential. Very happy with the way i can track my pension online and thru an app. I also understand the last few months have been hard and most peoples pension pots have taken a battering. Just got a query on fees. Im paying 0.8%  fee on my portfolio and 0.4% service fee on my pension pot. Currently about £100k.  In the last year this has added up to around £70 per month in fees. Im currently paying £125 a month contribution. So more than 50 % is on fees. Is this normal ? If my pension pot increases to £150k my fees will increase but i dont wish to increase my contributon so the percentage of fees would be even greater. Can i just freeze the pot ? Pay no service fee, No portfolio fee ? In 3 years take a chunk out of the pot ? Move it elsewhere free of charge ? Ive arranged a meeting with a True Potential advisor but his advice will probably be edged towards carrying on making payments and fees and making TP money. Thanks for taking time to read this post. Looking forward to any help and advice

dunstonh

 Im paying 0.8%  fee on my portfolio and 0.4% service fee on my pension pot

TP normally have an adviser charge on top of that too unless you have sacked the adviser.

n the last year this has added up to around £70 per month in fees. Im currently paying £125 a month contribution. So more than 50 % is on fees. Is this normal ? 

It is not logical to equate the fees you pay to the monthly contribution as the two things are not linked.  The charges are against the value.   Not the contribution.

Can i just freeze the pot ? 

No.  And what would that achieve even if you could?

 Pay no service fee, No portfolio fee ?

Do you ask your supermarket to give you food for free too?  
You are being unrealistic if you are expecting a company to provide services free of charge.

1.2% is cheaper than a savings account at a bank just to give some context.   

Move it elsewhere free of charge ?

It is free to move it elsewhere but you will still suffer ongoing charges with the new provider.

 Ive arranged a meeting with a True Potential advisor but his advice will probably be edged towards carrying on making payments and fees and making TP money.

1 - making contributions benefits you.  Stopping them hurts you.
2 - using TP benefits TP.  A sales rep from TP isn't going to tell you that xyz provider can do it cheaper.

Marcon

stryker2001 said:

Good afternoon everyone. Just a little query on contributions and fees that im paying. Im 52 and have been paying small amounts into my private pension since i was 18. Moved pensions from one company to another with advice from a financial advisor. Now my advisor has retired and moved my pension and is now run by a company called True Potential. Very happy with the way i can track my pension online and thru an app. I also understand the last few months have been hard and most peoples pension pots have taken a battering. Just got a query on fees. Im paying 0.8%  fee on my portfolio and 0.4% service fee on my pension pot. Currently about £100k.  In the last year this has added up to around £70 per month in fees. Im currently paying £125 a month contribution. So more than 50 % is on fees. Is this normal ? If my pension pot increases to £150k my fees will increase but i dont wish to increase my contributon so the percentage of fees would be even greater. Can i just freeze the pot ? Pay no service fee, No portfolio fee ? In 3 years take a chunk out of the pot ? Move it elsewhere free of charge ? Ive arranged a meeting with a True Potential advisor but his advice will probably be edged towards carrying on making payments and fees and making TP money. Thanks for taking time to read this post. Looking forward to any help and advice

No pension provider will provide their services free. If they didn't make a profit, they'd be out of business. Depending on the actual funds you choose to invest in, you can certainly find a provider which offers lower fees than 0.8% - but fund performance can more than make up for higher fees, so it's not quite as simple as finding the cheapest option on offer.

Fees on a modern contract are almost invariably based on a %age of the total pension pot, so looking at the fees in comparison to your current contributions is understandable but not really helpful.

Linton

% fees are on total pot size, the contribution is irrelevent to the calculation.  You wouldnt expect everything to be free if you stopped contributing.  Someone has to pay the costs of running the online systems, maintaining the app, and paying the advisor's wages.  All of those costs are independent of whatever contributions you make.

You can always move your pension elsewhere free of charge, dispense with True Potential snd manage everything yourself.  Wherever you move to will have some charges.  One of the cheaper platforms, II,  charges £9.99/month, fixed. But they wont give you any advice.

Notepad_Phil

Linton said:

... One of the cheaper platforms, II,  charges £9.99/month, fixed. But they wont give you any advice.

Though that is just for holding the pension on the platform (and actually I thought the minimum for a new SIPP only customer was £12.99); you will also have to pay the fund charges and depending on which package you use then there is the potential that you will have to pay £7.99 for each time you buy or sell the funds that you wish to use and contribute to.

Albermarle

As a guideline , if you moved the pension , you could pay anything from 2% to about 0.3% , depending on the platform and the investments chosen . Something between 0.5% and 1 % would probably be more typical for a £100K pot.