Consolidating previous employer pensions

SamDude

I am on employer number 4 in the last 6 years, so have 3 previous pensions that I'm keeping tabs on. (The job changes were all progression/good-leaver moves).

I want to consolidate one or more as they are (relatively) underperforming, not just because of the current markets.

I appreciate they may have different lifestyling/risk profiles which have driven their performance, so I'm not comparing them like-for-like - but I have noted their fees and charges for comparison. I am in my mid 40s and have another ~20 years before I plan to retire, so I will also review the risk profile once combined as I feel the lifestyling options are too cautiously balanced.

I've summarised the pots from earliest to current, and used market data from FT.com to compare their performance over the last 1 year.

• ex-Pension 1: Aegon Retiready (Platform charge 0.45%, Investment 0.17% = total 0.62%)
• Current value: £18000
• Funds: BlackRock UK Index-Linked Gilt Tracker (21%), BlackRock 50/50 Glob Eq Tracker (58%), UK Corp Bond (21%)
• Performance since August 22: -15%

• ex-Pension 2: Aviva (fund charge 0.3%)
• Current value: £18000
• Fund: My Future Growth XE
• Performance since August 22: -10%
  

• ex-Pension 3: Scottish Widows (0.45%)
• Current value: £64000
• Fund: Pension Portfolio One Pension (Series 2)
• Performance since August 22: -9%

• Current pension: Royal London (0.49%)
• Fund: Balanced Lifestyle Strategy - Governed Portfolio 4
• Current value: £5000 (and approx £3300 going in monthly via salary sacrifice)
• Performance since August 22: -4% (not a fair comparison due to ongoing contributions)

Thoughts out loud:

• There are no fees to transfer out for any them, so this does not limit my decision.
• I am not satisfied with Aegon (ex-pension 1) due to the higher charge and lower performance.
• I have been reading about the poor service for Scottish Widows (ex-pension 3).

I am considering transferring the Aegon and potentially Scottish Widows to either:

• Aviva (ex-pension 2) as it is performing 'ok' and has the lowest fee (0.3%)
• Royal London (current employer pension) which is performing well, and as a mutual has a ProfitShare scheme that pays a bonus (annually) of 0.15-0.18% of the pension held. Not sure if this is a gimmick or makes it worthwhile transferring all the ex-pensions to bump up the profit share value. This would dilute the 0.49% charge if nothing else.
• Vanguard SIPP. I have an ISA with Vanguard, so I am familiar with their service and lower charges. Is it worthwhile rolling up the Aegon, Aviva and Scottish Widows pots into a Vanguard SIPP. 

Thoughts appreciated on the above please.

dunstonh

Performance comes from the investment funds.  Not the pension.  If you have 5 pensions investing in 5 different unds at different risk levels then performance will be different.  If you invest in the same found across the 5 pensions, then performance will be the same.   So, whilst you are looking at performance remember that its not the pension provider that makes the difference.

 as a mutual has a ProfitShare scheme that pays a bonus (annually) of 0.15-0.18% of the pension held. Not sure if this is a gimmick or makes it worthwhile transferring all the ex-pensions to bump up the profit share value. This would dilute the 0.49% charge if nothing else.

Most RL pensions have a fund based discount as well.  The more you have, the lower the charge.     The profit share is not a gimmick.  Its paid out annually since introduced.  They reserve the right not to pay it, as is sensible but remember a mutual is owned by the members.   There are no shareholders.   So, this is effectively a dividend.

SamDude

Thanks - I do understand the performance comes from the underlying investments based on their lifestyle/fund choices (which I acknowledged:

I appreciate they may have different lifestyling/risk profiles which have driven their performance, so I'm not comparing them like-for-like - but I have noted their fees and charges for comparison.

So to rephrase my question I am asking for thoughts on the providers (Aegon, Scottish Widows, Aviva, Royal London) when comparing their fees and service.

The information I have about the RL pension doesn't state anything about fund discount based on the value of the pension.
Is this RL wide, or for specific products?

dunstonh

The information I have about the RL pension doesn't state anything about fund discount based on the value of the pension.
Is this RL wide, or for specific products?

All the pension providers you mention have different pension versions for different distribution channels.     So, there will be differences.  RL's individual personal pension plan from about 2004 has had fund based discounts.  It was originally a Scottish Life product which came under RL's control and they used that pension to replace their previous one as it was better.   RL also have their original branded legacy products and they have the old CIS, Refuge and United Friendly products.   They have a simplified workplace offering as well but I dont think discounts apply to that beyond what the employer can obtain.

Albermarle

Comparing any investment funds over such a short time scale will tell you very little. You are measuring them during very specific market conditions. The longer you can look back the more accurate a picture you will see. Even if you only go back to Jan 1st 2021, you will get a clearer picture.

Normally Royal London require you go via a financial advisor to set up new products, make transfers etc. However the exact rules are not clear ( to me ) and as it is an existing workplace pension, this might not be the case. This might also apply to Aviva as well. Worth a check at least.

• Vanguard SIPP. I have an ISA with Vanguard, so I am familiar with their service and lower charges. Is it worthwhile rolling up the Aegon, Aviva and Scottish Widows pots into a Vanguard SIPP. 

It could be, probably their customer service/website is better than Aegon and SW at least. There are also many other modern SIPP providers and there are pros and cons to each.

penners324

Merge them into whatever you feel is best for you. Vanguard probably.

I did this 5 years ago and used PensionBee

dunstonh

I did this 5 years ago and used PensionBee

Pensionbee probably has a better web/app interface but their charges are higher for that benefit (apart from Aegon).   However, providers to the Direct-to-client market are usually better than providers aimed at the workplace pension or intermediary market.    

SamDude

Thanks all.

As I look more towards moving the 3 pots to a Vanguard SIPP with Vanguard, I'm now looking to move to an ii SIPP with the same Vanguard target retirement fund.
The combined pensions are hovering at the £100k mark which is close to the £104k point where ii becomes more efficient for Vanguard investments, and I would also get £300 cashback (or £200 if it dips below £100k) from ii as a new investor.

Does anyone spot any warnings signs with what I'm about to do?

Albermarle

SamDude said:

Thanks all.

As I look more towards moving the 3 pots to a Vanguard SIPP with Vanguard, I'm now looking to move to an ii SIPP with the same Vanguard target retirement fund.
The combined pensions are hovering at the £100k mark which is close to the £104k point where ii becomes more efficient for Vanguard investments, and I would also get £300 cashback (or £200 if it dips below £100k) from ii as a new investor.

Does anyone spot any warnings signs with what I'm about to do?

Sounds OK as long as you are sure ii offer the specific fund you want.

lollynerd

Hi Sam,
Based on my experience with Aviva's withdrawal process, I wouldn't touch them with a bargepole.
They are cheap, but so are Vanguard and Fidelity and they offer a much better service (in my experience).

SamDude

Albermarle said:

SamDude said:

Thanks all.

As I look more towards moving the 3 pots to a Vanguard SIPP with Vanguard, I'm now looking to move to an ii SIPP with the same Vanguard target retirement fund.
The combined pensions are hovering at the £100k mark which is close to the £104k point where ii becomes more efficient for Vanguard investments, and I would also get £300 cashback (or £200 if it dips below £100k) from ii as a new investor.

Does anyone spot any warnings signs with what I'm about to do?

Sounds OK as long as you are sure ii offer the specific fund you want.

Yep ii have the Vanguard Target Retirement 20xx range, which is what I would have picked if going direct to Vanguard.

Think I'm going to pull the trigger on this and transfer all 3 pots in the next few days.