Aegon Pension - costing me money to keep it.

Trooper21

I got this pension around 20 plus years ago and didn't continue to pay into it as i'd got a local Government pension.

I've tried to get my head around my retirement position as I was a SAHM for some years, and have recently started paying a small amount of £10 a month back into it. This is in addition to my workplace pension and I am in my 40's.

It costs me £7 a month - stated as 'annual charges' and the value has dropped by £1k in a year.

Am I stuck with it? Can I move it? I left it where it was when I changed jobs and didn't transfer it in, as I thought I may not want all my eggs in one basket when it comes to retirement. but at this rate, there will be no fund left for me to retire on, based on the charges they are making and the amount I am currently able to contribute.

I am trying to figure out if I can still transfer it into my local gov pension fund, but think it may time limited.

Linton

The fund will have been going up and down in price for the past 20 years, mostly up.  Most funds are down in the past 6 months or so.  At some stage they will go up.

Whether £7/mnth is significant very much depends on the size of the pension pot  - how much is in the pension? How much was in it a year ago?

Performance is mainly dependent on the fund chosen, not the pension provider.  What fund(s) are you using

It should be easy to move your pension elsewhere.  All you probably would need to do is to set up a pension to move it to and ask the new pension provider to transfer-in your current pension.

MallyGirl

I suspect that you have missed the boat for transferring it into the local gov one but, unless it has safeguarded benefits, then it should be straightforward to transfer it to a modern pension or SIPP. For SIPPs the charging varies - it can be a percentage of the value - good for lower value - or a fixed fee which is better for higher amounts.
The pension is invested so it is not a surprise that it dropped last year - pretty much everyone had that.

Albermarle

Typically a medium risk pension pot, will have dropped around 10% since January 1st , as financial markets have reacted to various events, like Ukraine war for one. On the other hand the same pot could be around 50 to 60% up over the last ten years.

Regarding the charges, the £7 a month maybe only be the explicit charges and there may be more fund charges . Or it may be the full charge. It does not sound a lot really, everything has a charge, even pensions. 

Trooper21

Linton said:

The fund will have been going up and down in price for the past 20 years, mostly up.  Most funds are down in the past 6 months or so.  At some stage they will go up.

Whether £7/mnth is significant very much depends on the size of the pension pot  - how much is in the pension? How much was in it a year ago?

Performance is mainly dependent on the fund chosen, not the pension provider.  What fund(s) are you using

It should be easy to move your pension elsewhere.  All you probably would need to do is to set up a pension to move it to and ask the new pension provider to transfer-in your current pension.

£13k to £12k this year.

NO idea. SIPP Contribution Tax relief is mentioned. Does that mean it is a SIPP?

MallyGirl said:

I suspect that you have missed the boat for transferring it into the local gov one but, unless it has safeguarded benefits, then it should be straightforward to transfer it to a modern pension or SIPP. For SIPPs the charging varies - it can be a percentage of the value - good for lower value - or a fixed fee which is better for higher amounts.
The pension is invested so it is not a surprise that it dropped last year - pretty much everyone had that.

Yeah i'm enquiring to see what my options are.

My concern is that this rate there will be nothing left come retirement and the TrustPilot reviews are quite scary.

So I can transfer out? Regardless? I just have to chose another pension pot or SIPP?

Never had to worry about this with the LG one, I know it's not masses, but it's mine!

Albermarle

NO idea. SIPP Contribution Tax relief is mentioned. Does that mean it is a SIPP?

Within the pension, your money is invested in an investment fund. You can choose which one from a list. For these workplace pensions if you do not choose one, it chooses one for you. It is is this investment fund which goes up and down with the financial markets. A drop of less than 10% this year is better than average. In the long run it should recover.

My concern is that this rate there will be nothing left come retirement and the TrustPilot reviews are quite scary.

So I can transfer out? Regardless? I just have to chose another pension pot or SIPP?

If you had had an investment fund within another pension/Sipp it would also have gone down. Also with a new pension you would most likely have to choose the investment yourself.

I think it might be easier just to leave it where it is, as it is not clear that moving it will bring any obvious benefit.

dunstonh

Am I stuck with it? Can I move it? I left it where it was when I changed jobs and didn't transfer it in, as I thought I may not want all my eggs in one basket when it comes to retirement. but at this rate, there will be no fund left for me to retire on, based on the charges they are making and the amount I am currently able to contribute.

Why do you think the fund will run out?  Nothing you have said suggests anything like that.

They are charging more than you are paying in because you are paying in peanuts.  However, the charge they are making is not against your contribution but against the value of the fund.    What you pay in and the charge being made are not linked.

My concern is that this rate there will be nothing left come retirement and the TrustPilot reviews are quite scary.

Ignore trustpilot.  Its a complete waste of time when looking at financial services. 
e.g. Aegon have about 5 different distribution channels and hundreds of different types of pensions.   Which distribution channel and which pension are these reviews based on?
Are the reviews from people who know what they are talking about? (usually not).

So I can transfer out? Regardless? I just have to chose another pension pot or SIPP?

Why do you need to transfer out?

Never had to worry about this with the LG one, I know it's not masses, but it's mine!

There is no worry with this one either.   You are just misunderstanding what you have and how it works. 

You had £13k.     Your charges were about £84 over the year.  That equates to 0.6% p.a. which is fine.  You wont ever run out of money because of  0.6% charge    

Your L&G one would have gone down at various points.     We have seen drops in 2022, 2020 (3rd biggest in the last 25 year), 2018, 2015/16, 2008/9, 2000-2002.     All quite normal and nothing to be concerned about.   

Trooper21

Thank you, it can seem a lot to get your head around, so thanks for the insight.

I will leave it where it is and continue with my payment untilat such time I feel able to up my contributions. I just thought something was better than nothing.

QrizB

Trooper21 said:

I just thought something was better than nothing.

Something *is* better than nothing, you are right about that.