Considerations for transferring my Aegon Pension

David7823

I'm 56 yrs old with 5 different pension funds (Aegon, Aviva, Standard Life, Vanguard, Scottish Widows), Aegon has the highest valuation, currently £310,000, but it has fallen the most in the last 2 yrs, from a high of £355k Q4 2021.

I have not paid into Aegon for years, but the annual charges are 1.26%, compared to 0.72% for the Standard Life fund - so Aegon costs seem high, which I would like to address if appropriate. 

Is it a given that I would be able to transfer my Aegon pension into Standard Life (or one of the others) or are there possible pitfalls, or negative consequences, I should be aware of?

Thanks

Pat38493

Aegon probably have a lot of different arrangements so you should check with them whether there are any charges to transfer out or any kind of safeguarded benefits.  My employer scheme is also an Aegon scheme but the charges are less than 0.6% so what you are quoting seems pretty high.  If I was paying more than 1% I would also be looking elsewhere.  

On other threads I have seen it stated that 1% is quite a lot as an ongoing charge even when you are including IFA charges.  

Beyond the charges though the other important point is to look at how your funds are invested within each pension and whether it’s suitable for your objectives.  

Albermarle

Normally transferring a DC pension from one provider to another is a straightforward process. The only issue is if a pension has any safeguarded benefits such as a guaranteed annuity rate.
As well as charges, you should consider the investment choice and the customer service.
Aegon and SW, seem to be a bit behind the times with the latter. 

dunstonh

I have not paid into Aegon for years, but the annual charges are 1.26%, compared to 0.72% for the Standard Life fund - so Aegon costs seem high, which I would like to address if appropriate. 

A) are you comparing like for like?  
are you looking at the real charge of the fund factsheet charge  (factsheets show the fund default maximum before any scheme discounts or fund based discounts).
C) Are you looking at these too short term?   i.e. 2022 was a negative year but a fund being paid into during 2022 would have lost less than a fund not being paid into, all other things being equal.  If your fund was heavier in tech or gilts in 2022, then it would have gone down more.  However, in 2020-21 it would have gone up more (and most of the last 11 years before 2022).

Is it a given that I would be able to transfer my Aegon pension into Standard Life (or one of the others) or are there possible pitfalls, or negative consequences, I should be aware of?

The pitfalls are that you have given us insufficient information to suggest that the Aegon pension is any worse/better than the alternatives.  Most Aegon pensions for the last 15 years have had a default charge of 1% for internal funds with higher for external funds but in reality are cheaper than that due to fund based discounts or, if an employer scheme, employer discounts or the auto-enrolment cap.  The more modern the Aegon scheme, the cheaper it will probably be but the factsheets will still default higher in many of their contracts.  You should never rely on fund factsheets for charges data.

David7823

A) are you comparing like for like?  

I think so, I'm looking at the annual statement from these two funds (Aegon and Standard Life)

are you looking at the real charge of the fund factsheet charge  (factsheets show the fund default maximum before any scheme discounts or fund based discounts).

Looking at my annual statement from Aegon which says 0.76% platform charge + 0.5% investment charge = 1.26% overall charge.

When I look at my Standard Life annual statement, it says 0.72% and when I see the total amount charged by Standard Life it really is 0.72%.

C) Are you looking at these too short term?   i.e. 2022 was a negative year but a fund being paid into during 2022 would have lost less than a fund not being paid into, all other things being equal.  If your fund was heavier in tech or gilts in 2022, then it would have gone down more.  However, in 2020-21 it would have gone up more (and most of the last 11 years before 2022).

The performance of the funds is a different issue, although I note that Aegon has done significantly worse in last couple of years than some of my others - but that isn't my focus at the moment, it's what looks like excessive charges

dunstonh

Looking at my annual statement from Aegon which says 0.76% platform charge + 0.5% investment charge = 1.26% overall charge.

That seems very high.  Aegon's platform charges are typically around  0.2x-0.3x range on their platform products.    I haven't seen one that high before. (both ARC and RR are cheaper)   Which Aegon platform are you with?

The performance of the funds is a different issue, although I note that Aegon has done significantly worse in last couple of years than some of my others - but that isn't my focus at the moment, it's what looks like excessive charges

It has relevance as a good chunk of the charge will be at fund level. ie. if one is using an external fund and the other is using an internal fund.   Or if one has a higher ratio of more expensive assets and vice versa with the other.

The reality is that both are more expensive than what is available elsewhere.    Aegon can get you 0.3x% on their latest contracts.  Std Life is a bit flux following its brand split (Standard LIfe become Abrdn and Phoenix bought the Standard Life brand and their legacy book of pensions)  You can get 0.2x-0.3x% with their latest ones.  Plus, you have all the DIY providers out there where you can get the same ballpark

So, looking at alternatives to both is likely to be the best option.

David7823

That seems very high.  Aegon's platform charges are typically around  0.2x-0.3x range on their platform products.    I haven't seen one that high before. (both ARC and RR are cheaper)   Which Aegon platform are you with?

I don't know to find the "Aegon Platform", when I login it says "RetireReady from Aegon", as far as I remember this was originally a Scottish Equitable account, I cannot remember the history of why it changed to "RetireReady from Aegon"

dunstonh

David7823 said:

That seems very high.  Aegon's platform charges are typically around  0.2x-0.3x range on their platform products.    I haven't seen one that high before. (both ARC and RR are cheaper)   Which Aegon platform are you with?

I don't know to find the "Aegon Platform", when I login it says "RetireReady from Aegon", as far as I remember this was originally a Scottish Equitable account, I cannot remember the history of why it changed to "RetireReady from Aegon"

Aegon bought Scottish Equitable.  It has multiple platforms as it has made multiple purchases.  Some years back, it moved some old SE policies onto its platform.

The Aegon RR charges are: (copied and pasted)


However, older SE policies had different charges and you may have been grandfathered over under the original charges.  A number of the SE policies worked on a higher AMC but gave them back as a proportion/bonus every 5 years.   So, the headline rate appears higher than it is.

If you are taking the charges figure from the statement and divide it by the current value then it will actually show a higher percentage than you are really paying.  (some providers do that percentage figure for you.    You could be as much as 0.25% out on what you are really paying if you are using that method.

Albermarle

Std Life is a bit flux following its brand split (Standard LIfe become Abrdn and Phoenix bought the Standard Life brand and their legacy book of pensions)  You can get 0.2x-0.3x% with their latest ones.  Plus, you have all the DIY providers out there where you can get the same ballpark

I presume the 0.2% /0.3% is for the pensions that are for advisors only.

The Standard Life brand ( now owned by Phoenix) is still active in promoting personal pensions to retail customers. So they are a DIY provider themselves.

Their standard funds cost 1% to about 1.1% ( just one charge, no platform charge) and with a pension above £25K there is a 0.5% discount. More actively managed funds cost more. They offer an' Help me do it' route that offers 4 lifestyle profiles ( 1 % charge)  or a more DIY route that offers around 250 fund options.

Also a good website and good customer service ( although some of this is about to be outsourced), so a viable alternative to the usual DIY platforms often mentioned.

dunstonh

I presume the 0.2% /0.3% is for the pensions that are for advisors only.

I haven't looked at their DIY offering but Abrdn did buy interactive investor, which can be a low cost platform for DIY consumers.  Their adviser platforms can actually get lower than those figures but that is the typical ballpark.

The Standard Life brand ( now owned by Phoenix) is still active in promoting personal pensions to retail customers. So they are a DIY provider themselves.

That side of thing took on the older products and from what you say about the pricing, that is older style pricing.