Pension charges - !!!!!!!

Audaxer

Deleted_User said:

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? 

Some would be, but looking at a couple of medium risk, globally diversified, low cost multi asset funds, VLS60 and HSBC Global Strategy Balanced, they are down between 4% and 6% over the last 12 months. On that comparison the OP's portfolio seems to have performed quite well, although some high equity portfolios will have performed better, but at a higher risk level.

Albermarle

Deleted_User said:

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? 

Yes could be, especially as markets have been positive in the last month .
A more medium risk portfolio ( and lower risk even more)  will have been dragged down by the woes of bonds.

Bobby_Applejuice

Thanks to all your replies. Much of this is over my head but I get the gist.

I am with Clerical Medical. 

It does clearly state 'We deduct 2.10% of the fund value each year. As you have more than one investment fund, the figure shown here represents the highest AMC of all your funds'

You're all correct, I misread charges and have since found this regarding the £5206: 'Your plan has decreased by £5206 as a result of investment performance. The figure includes a large bonus earned over the statement period and is calculated after charges we make for running your plan have been taken into account.'

So you all generally appear to feel this has perfumed OK under the circumstances? As I'm out of work right now and can't contribute, would you recommend just letting it sit for now?

SueLowe65

Hi. I have an existing pension that I want to transfer to a SIPP.  The pension company are insisting that I find a financial adviser to complete a "financial advice confirmation form". Most want to charge me over £1000 to do this. I understand why - I think it's a con but I get it. It's in case I sue the pension company so they want to deflect liability. Any advice on whether I can avoid paying this fee? TIA. 

Dazed_and_C0nfused

Is the existing pension a Defined Benefit scheme?

Or is it a DC fund with protected benefits?

MallyGirl

SueLowe65 said:

Hi. I have an existing pension that I want to transfer to a SIPP.  The pension company are insisting that I find a financial adviser to complete a "financial advice confirmation form". Most want to charge me over £1000 to do this. I understand why - I think it's a con but I get it. It's in case I sue the pension company so they want to deflect liability. Any advice on whether I can avoid paying this fee? TIA. 

Hi - I recommend you starting your own thread instead of posting on this one as you will get more visibility.

Albermarle

And when you start your new thread, answer the question Dazed & Confused asked, so there is more detail. You could also state why you want to move it . 

dunstonh

I am with Clerical Medical. 
It does clearly state 'We deduct 2.10% of the fund value each year. As you have more than one investment fund, the figure shown here represents the highest AMC of all your funds

Clerical Medical PPPs offered internal funds as well as external funds.   CM closed for new business over a decade ago. So, its in the period of higher charges.     Their last pensions offered tended to be good value for the era if you had enough internal funds but not the case today.  If you were heavy on external funds then getting to or over 2% was possible.

e.g. CM IP emerging markets was 2.1% p.a. but internal funds were 1%.

However, they also had fund based discounts on those charges.  e.g. £50k+ would get a 0.20% deduction.   Discounts were not normally shown in the fund charges list as a reduced fund charge but applied separately afterwards.

So, it is not saying that your whole charge is 2.1% but that your highest charged fund is 2.1%.  And its showing the fund charge but not any discount applied (if applicable).

So you all generally appear to feel this has perfumed OK under the circumstances? As I'm out of work right now and can't contribute, would you recommend just letting it sit for now?

The plan is probably out-of-date compared to modern options and can be improved upon.  If there are no contractual reasons or safeguarded benefits then investigating moving it to a modern plan should be considered.  

[Deleted User]

Bobby_Applejuice said:

Thanks to all your replies. Much of this is over my head but I get the gist.

I am with Clerical Medical. 

It does clearly state 'We deduct 2.10% of the fund value each year. As you have more than one investment fund, the figure shown here represents the highest AMC of all your funds'

…

So you all generally appear to feel this has perfumed OK under the circumstances? As I'm out of work right now and can't contribute, would you recommend just letting it sit for now?

We can’t comment on performance. Whether its acceptable or not depends on your asset allocation. 

The charges should be transparent and anything over 1% is ludicrous in this day and age.  Personally, i consider anything over 0.5% unacceptable (including platform, fund and any other operational charges on total portfolio). 

If I were you, I would read a couple of books and then pick a more appropriate set of asset allocation, platform and funds. 

bostonerimus

Deleted_User said:

Bobby_Applejuice said:

Thanks to all your replies. Much of this is over my head but I get the gist.

I am with Clerical Medical. 

It does clearly state 'We deduct 2.10% of the fund value each year. As you have more than one investment fund, the figure shown here represents the highest AMC of all your funds'

…

So you all generally appear to feel this has perfumed OK under the circumstances? As I'm out of work right now and can't contribute, would you recommend just letting it sit for now?

We can’t comment on performance. Whether its acceptable or not depends on your asset allocation. 

The charges should be transparent and anything over 1% is ludicrous in this day and age.  Personally, i consider anything over 0.5% unacceptable (including platform, fund and any other operational charges on total portfolio). 

If I were you, I would read a couple of books and then pick a more appropriate set of asset allocation, platform and funds. 

My latest quarterly statement for one of my DC accounts, which is 45% large cap US and international equity index funds and 55% capital preservation...essentially cash..., shows an 8% drop from March to June, there are no transaction fees when I make withdrawals and the annualized management fees are 0.08%. I am in the USA, don't have a financial advisor and the pension account is from a government employer. This is why UK fees usually shock me.

If either Liz or Rishi want to put money back into people's pockets reducing pension fees would be one way of doing it, but I don't see that happening - too interventionist and it would annoy too many powerful friends.