People's Pension Transfer Nightmare

Bimbly

Can you call People's Pension and go through the form over the phone as you fill it in?

Is it possible to transfer to a different fund within the Halifax SIPP which will satisfy the People's Pension? Some sort of cash/money market fund maybe? Then when the transfer is complete, invest that money how you want? Just to get round this sticking point.

Albermarle

Yes, incurring charges, but given my fees are capped, the transfer actually leaves me better off, as I will no longer pay the (hidden) People's Pension fund charges.

For other people reading through this thread, it is probably worth just clarifying this point, to avoid potential misunderstanding.

AFAIK Peoples Pension do not have 'hidden charges', they are stated clearly on the website. In fact their charges are very competitive compared to other similar pension providers, especially as your fund size grows.

The OP's transfer (currently stalled) will save them money, because they will only be buying individual shares in their new SIPP - AFAIU. This would not be a typical thing to do for the large majority of pension investors, who stick to funds. Therefore  for the large majority of Peoples pension clients, a move to another provider/SIPP, would probably mean higher charges, rather than lower.

I take your point re loss potential, but that's a fact with all SIPPs - and given recent issues in many pension funds going bust, who's to say they are any safer?

As Dunstonh said, not sure any pension funds have ever gone bust. Some funds that some people will have individually decided to  hold in a SIPP, may have performed particularly badly, like Woodford, but this is the danger of self selecting funds, as opposed to using mainstream pension funds.

[Deleted User]

Woodford, but this is the danger of self selecting funds, as opposed to using mainstream pension funds.

How do you define self selected vs mainstream?  Seem to recall Woodford was recommended on popular platforms as well as by advisors.  300k people were investors at the time of collapse which means it was fairly popular.

There were danger signs for sure (illiquid assets being the main one) but lots of other UK funds hold similar assets which seem to be quite popular. 

Albermarle

Deleted_User said:

Woodford, but this is the danger of self selecting funds, as opposed to using mainstream pension funds.

How do you define self selected vs mainstream?  Seem to recall Woodford was recommended on popular platforms as well as by advisors.  300k people were investors at the time of collapse which means it was fairly popular.

There were danger signs for sure (illiquid assets being the main one) but lots of other UK funds hold similar assets which seem to be quite popular. 

As the OP was referring to pension funds, in the UK this would normally mean funds from the big pension companies, like Aviva, Scottish Widows etc, or auto enrolment providers,  which have never gone bust. This is where the large majority of people's pension money sits.

Of course if you look at the minority who branch out a bit more, like those on this forum, you could have a debate about what is mainstream and what is not,

bermondse1

Would you like to name any of these recent pension funds going bust as I cannot think of any?

Equitable Life many many decades ago but none since.  
Pension funds get 100% FSCS protection with no upper limit
OEIC/UTs, which are the other main fund types used in most SIPPs dont get as much FSCS protection at 85k but they haven't been going bust either.

Yeah - I got stung with EL - that's largely behind my dislike/distrust of funds.

Though actually I'm guilty of loose language - I was referring more to occupational schemes with deficits where the sponsoring co goes bust. In this case they've needed to be bailed out by the Pension Lifeboat, often with a cut to fund values. eg Carillion, BHS, Arcadia generally...people seem to think their occupational schemes are safe when in many cases they aren't as safe as they think.

bermondse1

Albermarle said:

Yes, incurring charges, but given my fees are capped, the transfer actually leaves me better off, as I will no longer pay the (hidden) People's Pension fund charges.

For other people reading through this thread, it is probably worth just clarifying this point, to avoid potential misunderstanding.

AFAIK Peoples Pension do not have 'hidden charges', they are stated clearly on the website. In fact their charges are very competitive compared to other similar pension providers, especially as your fund size grows.

Again I'm guilty of lose language. The charges are more opaque, and confusing than hidden.

Having looked at my annual statement from PP, I suspect most people would be hard pressed to know what exactly they are being charged, given the combination of an annual charge, and fund management charge (that isn't in the statement) and a fund charge rebate.

It all seems unnecessarily complicated.

dunstonh

Yeah - I got stung with EL - that's largely behind my dislike/distrust of funds.

It should be noted that the failure was not down to funds.  It was down to letting the marketing team decide the guaranteed annuity rates without checking they were affordable.     The GARs were offered on the With Profits investment and not on the funds.

Though actually I'm guilty of loose language - I was referring more to occupational schemes with deficits where the sponsoring co goes bust. In this case they've needed to be bailed out by the Pension Lifeboat, often with a cut to fund values. eg Carillion, BHS, Arcadia generally...people seem to think their occupational schemes are safe when in many cases they aren't as safe as they think.

Those types of pensions get 90% protection and they have no value. 

Albermarle

Having looked at my annual statement from PP, I suspect most people would be hard pressed to know what exactly they are being charged, given the combination of an annual charge, and fund management charge (that isn't in the statement) and a fund charge rebate.It all seems unnecessarily complicated.

£2.50 pa + 0.5% ( discounted when you have more money invested) 

If you read the full charging structure of some other pensions, you would not think that was complicated !