Is my pension charge reasonable

martindias

Just approaching my annual pension review with St James’s Place. From my £200,000 odd sum invested I draw an annual pension of £7,200. But……I pay annual fees of £5,000. Soo time to reassess as I’m now outside the 6 year period where I’m charged to move my pension. Any advice gratefully accepted soo I’ve questions to ask ….. Oh - by the way I’m 70 yrs and have been drawing my pension for 5 years.

dunstonh

I pay annual fees of £5,000. 

That is far too high. It equates to 2.5% of your fund value.    Half that would be better.

The choice is to go with an IFA or DIY.   You picked a sales rep FA.  So, you are not going to get anyone here telling you to stick with SJP.

Kim1965

No, the charges are u reasonable. 

Beddie

According to SJP their charges are mostly a little under 2%

https://www.sjp.co.uk/sites/sjp-corp/files/SJP/our-charges/pension-charges/SJP11539_B1_Pension_Charges_Summary_lowres_new_portrait.pdf

Perhaps book an appointment with a local IFA and have a chat about moving it to reduce charges. They will probably charge you 3% one-off fee to move it to their preferred platform and their total charges will likely be about 1.5% (or less with passive funds.) So a saving should be made over time.

Might be worth phoning your adviser at SJP and trying to negotiate lower charges, you never know, they might want to keep you!

bostonerimus

martindias said:

Just approaching my annual pension review with St James’s Place. From my £200,000 odd sum invested I draw an annual pension of £7,200. But……I pay annual fees of £5,000. Soo time to reassess as I’m now outside the 6 year period where I’m charged to move my pension. Any advice gratefully accepted soo I’ve questions to ask ….. Oh - by the way I’m 70 yrs and have been drawing my pension for 5 years.

That's ridiculously high. Honestly how does SJP expect a pension drawdown plan to survive with those level of fees. If you were DIYing you'd only have platform fees and fund fees to take into account so you could be at 0.5% or less.

gm0

Terrible fees. Up to 2.3% pa too expensive to do the same activity.

Run don't walk.   And don't get fooled again

DIY drawdown is doable at 0.2% - 0.3% all in.  Cashbacks on transfer can offset fees for a bit beyond that. 

Advice is 0.5% pa or less and a platform based setup at 0.3% or so

Initial charges are negotiable and 1% or 2% charges should be avoided this time vs an admin fee as you are already setup and tidy.  Do they want the ongoing or not ? Shop around.

IFA not FA if you want it again. 

But no DFM (less work for them more charge for you - avoid - if you know why you need one - great.  If not - you likely don't).

And not an old IFA who is organising his client list for an FA network sell (out) of client base retirement exit.

Take some simple multi-asset fund performance numbers for the year(s) of interest with you. Annual.  Rolling 12 etc.  Validate whether they performed pre and more importantly net fees.  Should be illuminating and entertaining.

But they generally have their shame gland surgically removed so its less entertaining than you would hope.

[Deleted User]

This is predatory pricing. Terrible.  

Given age, I would not suggest you should start DIY. Have you looked into annuities?  You should be able to draw more with more safety, whether its annuity or another solution. 

Bimbly

Deleted_User said:

Given age, I would not suggest you should start DIY. Have you looked into annuities?  You should be able to draw more with more safety, whether its annuity or another solution. 

Excellent point. Ask an IFA to look into this for you - don't get SJP to do it.

dunstonh

Perhaps book an appointment with a local IFA and have a chat about moving it to reduce charges. They will probably charge you 3% one-off fee to move it to their preferred platform and their total charges will likely be about 1.5% (or less with passive funds.) So a saving should be made over time.

Whilst 3% initial is still possible, its higher than the average initial which is 1.8% (average meaning some pay more, some pay less).   With the OP's fund size, you would expect to see around 1-1.5% initial as a guide.