Consolidate my Pensions?

sazandy25

Hi, I am currently 42 years old & I have ended up with 3 separate pension plans.

1) Aviva Pension Retirement Distribution AP - Total Value £10,967
 I set up this up in 2007, I used to pay in £50 a month, (now reduced to £16)

2) Standard Life Managed pension fund FA - Total Value £19,113
Previous employer pension, NO longer pay anything in.

3) The People Pension Balanced profile - Total Value £4,459.87
Current employer pension, I pay 4% of earnings in - employer pays 3% (not the best)

I have recently received a statement (hence this post) and notice the charges being made & have looked into all 3 (maybe should of looked before?).

1) Aviva - £102.69
2)Standard Life £124.36
3) The Peoples Pension £2.50 plus rebate of £0.89 (Members pay an annual management charge made up of 3 elements – an annual charge of £2.50, a management charge of 0.5% on the value of your pension pot each year and a potential rebate on the management charge on savings over £3,000).

I am thinking of transferring the Aviva into the Standard life or transferring all into the Peoples pension, unsure what to do.  Just don't see the point of having 3 ALL charging an annual fee, any guidance gratefully received.

dunstonh

I have recently received a statement (hence this post) and notice the charges being made & have looked into all 3 (maybe should of looked before?).

With those small pension values, the charges levels are not really making much of a difference.  e.g. a 0.10% difference is just £34 a year.  Your value changes more than that in 10 minutes of market activity

Just don't see the point of having 3 ALL charging an annual fee, 

Apart from the peoples pension, its likely that the other two are annual management charge only.  So, whether you have one pension or three wont itself change the charges if all three had the same AMC.     Its possible that the peoples pension is the most expensive one.  But if your other two are older plans, they may be more.  

Simon11

I would focus your initial effort on whether you can increase the size of your pension pot. £35k in the pension pot at 42 will not provide much in retirement and you will heavily want to increase it, in order to have a comfortable retirement or retire earlier.

QrizB

Simon11 said:

I would focus your initial effort on whether you can increase the size of your pension pot. £35k in the pension pot at 42 will not provide much in retirement and you will heavily want to increase it, in order to have a comfortable retirement or retire earlier.

I was holding off from saying that but yes, 4%+3%+£16/month is not going to amount to very much, even over the next 25 years.

Could you afford to increase your 4% to, say, 12%?

Albermarle

All these pensions have a % charge on the funds, so you are not paying triple. If you consolidate them all into one then you will just  pay a % on a larger fund.

From your figures Aviva are charging around 1%; SL around 0.65% and PP around 0.5% with a small rebate.
If you consolidated all into PP , the rebate would be 0.25% do the annual charge would only be 0.25%.

So from a charges point of view, PP wins and Aviva loses.

PP has a much more restricted range of funds, but that would not bother most people.

As above , more important is to try and add more to build up the pot. You really need a large pot to generate a decent income/allow you to retire before state pension age .

sazandy25

Thanks for all advice, am going to look at increasing % that I pay in to my current work pension & see if the company matches. (not likely, small family firm, but worth enquiring). 
Also going to workout if either of the 2 others (Aviva & Standard life) have performed massively better. The standard life charge is less, so if its performed better, surely transferring Aviva in makes sense? (1 charge of 0.65% but performing better)
Thanks again for all responses 

Albermarle

sazandy25 said:

Thanks for all advice, am going to look at increasing % that I pay in to my current work pension & see if the company matches. (not likely, small family firm, but worth enquiring). 
Also going to workout if either of the 2 others (Aviva & Standard life) have performed massively better. The standard life charge is less, so if its performed better, surely transferring Aviva in makes sense? (1 charge of 0.65% but performing better)
Thanks again for all responses 

Even if the company will not match higher contributions from you, then you can still increase yours anyway and benefit from tax relief.
Pension themselves do not perform, it is the investments inside them that perform. For example.
Within the Aviva pension your money could be in an investment fund that is 100% invested in US stock market ( pretty risky)
In this case you would have seen spectacular growth over the last few years, but quite a big slump this year, but overall some very good growth on average.
Then lets say in the SL pension you were invested in a middle of the road default fund with a mixture of shares and bonds, and a lot in UK. IN this case the growth in the last few years would have been pedestrian, but a much smaller drop this year, but overall only modest growth on average.

However this does not mean the Aviva pension has done better than the SL one. It means the investments in the Aviva pension will have done better. As both will have a reasonably good choice of investment funds then the choice of investment fund(s), is much more critical than the choice of pension provider.

sazandy25

Albermarle said:

sazandy25 said:

Thanks for all advice, am going to look at increasing % that I pay in to my current work pension & see if the company matches. (not likely, small family firm, but worth enquiring). 
Also going to workout if either of the 2 others (Aviva & Standard life) have performed massively better. The standard life charge is less, so if its performed better, surely transferring Aviva in makes sense? (1 charge of 0.65% but performing better)
Thanks again for all responses 

Even if the company will not match higher contributions from you, then you can still increase yours anyway and benefit from tax relief.
Pension themselves do not perform, it is the investments inside them that perform. For example.
Within the Aviva pension your money could be in an investment fund that is 100% invested in US stock market ( pretty risky)
In this case you would have seen spectacular growth over the last few years, but quite a big slump this year, but overall some very good growth on average.
Then lets say in the SL pension you were invested in a middle of the road default fund with a mixture of shares and bonds, and a lot in UK. IN this case the growth in the last few years would have been pedestrian, but a much smaller drop this year, but overall only modest growth on average.

However this does not mean the Aviva pension has done better than the SL one. It means the investments in the Aviva pension will have done better. As both will have a reasonably good choice of investment funds then the choice of investment fund(s), is much more critical than the choice of pension provider.

So, keep both, and pay more into my current work pension.

Thanks for all advice 👍