Pension charges - !!!!!!!

Bobby_Applejuice

I haven't paid into my pension in the last 5 years as I lost my job, then had a job for a few years which helped me get back on my feet. I planned to start paying into my pension again this year but I've found myself out of work again.

It's not been high on my agenda to think about it be be honest with so much going on, but I received a statement recently which is my first in years. It shows that this time last year the value was £151,370 and is now worth £146,164. The difference is the £5206 of charges in the last 12 months! That is crazy! So in theory if I just leave my pension sat there it will potentially decrease by 5k each year?

Also, does that mean in the last 5 years they've taken approx. £5k each year??

That is my hard earned money they're just stripping away from me. What would anyone recommend I do at this at this stage to try and retain as much as possible?

TadleyBaggie

Are you sure that is down to charges and not down the reduction of the value of the funds the pension is invested in?

Bobby_Applejuice

Just found this: 'We deduct 2.10% of the fund value each year', which doesn't equate to that figure (but is still a lot).

MallyGirl

Bobby_Applejuice said:

Just found this: 'We deduct 2.10% of the fund value each year', which doesn't equate to that figure (but is still a lot).

Who is your pension with - it might be that transferring it elsewhere could reduce the fees.
The value will likely have fallen in the last year as that has been the general pattern for investments.

dunstonh

 It shows that this time last year the value was £151,370 and is now worth £146,164. The difference is the £5206 of charges in the last 12 months!

That seems extremely unlikely.

Total costs are likely to be somewhere between 0.4% and 1.8%.  1.8% of £15370 is £2724.   Your drop is 3.4%. 
   

That is crazy!

It is. This is why your understanding is likely to be wrong.

For example, how much is your current loss due to investment returns?  You haven't mentioned those in your post.  Most portfolios are down around 15%.   You say you are down 3.4% and its all due to charges and nothing to with it being a negative period on the stockmarket and bond markets.  That is not feasible.

What would anyone recommend I do at this at this stage to try and retain as much as possible?

Correct your misunderstanding and you will realise all is fine and its just you not reading it correctly that is wrong.

Albermarle

Bobby_Applejuice said:

Just found this: 'We deduct 2.10% of the fund value each year', which doesn't equate to that figure (but is still a lot).

If the charges are 2.1% that is very much at the high end . Who is the pension with ?

xylophone

Have you obtained a state pension forecast?

https://www.gov.uk/check-state-pension

Is the pension to which you refer your only pension or do you have others?

Which company is the pension provider?

Marcon

Albermarle said:

Bobby_Applejuice said:

Just found this: 'We deduct 2.10% of the fund value each year', which doesn't equate to that figure (but is still a lot).

If the charges are 2.1% that is very much at the high end . Who is the pension with ?

...and which funds are you invested in? Charges aren't usually 'flat' across the whole range of fund choices.

dunstonh

Also, it may not be 2.1%.

The annual charges disclosure takes the actual charges paid in monetary terms over year.   If you apply those to the current value (at the point of statement), you will get an inaccurate percentage figure.    In periods of growth, that figure would be lower but in periods of loss, that figure would be higher.

It could be closer to 1.7% when you consider recent falls and the typical ballpark loss figure.

Audaxer

Bobby_Applejuice said:

It shows that this time last year the value was £151,370 and is now worth £146,164. The difference is the £5206 

If the value of the investments in your pension has only fallen by that relatively small percentage, after the charges have been applied, in the last 12 months, that is a good result as most pensions are down by a much larger percentage. If you can find or request statements for the previous 4 years, you will probably find that your pension value increased quite a bit in these previous years. 

[Deleted User]

Audaxer said:

Bobby_Applejuice said:

It shows that this time last year the value was £151,370 and is now worth £146,164. The difference is the £5206 

If the value of the investments in your pension has only fallen by that relatively small percentage, after the charges have been applied, in the last 12 months, that is a good result as most pensions are down by a much larger percentage. If you can find or request statements for the previous 4 years, you will probably find that your pension value increased quite a bit in these previous years. 

True for year to date but not at all sure this is accurate for a 12 months period.  Wouldn’t most people with high equity percentage, internationally diversified portfolios, reasonable investment costs (<<1%) and counting in GBP still be in the black in nominal terms?