combine work pensions or leave as they are?

sgun

Posting on behalf of husband who has little interest in financial matters but wants make sure he is making the most of a small pension pot. He is 49.

He has recently moved from being self employed (with no personal pension) into employment again and has been placed into Royal London Retirement Solutions Group Personal Plan. He contributes 10%  and employer 5% on a £33,000 wage. Yearly bonuses are around £6000. As far as I can see the management charge is 0.62% but I can't see any other fees.

He has £20,000 in Zurich Managed Equity and Bond AP, its an older plan and it has no online portal so I'm going on his minimal paperwork that shows fund charges as 0.13% but I'm sure I'm missing something here.

He has £61,000 in Aegon Retireready that seems to charge 0.5% up to 50k and then 0.4% up to 100k.

It seems to me that he wouldn't gain from combining his pensions but I'm sure I'm missing some fees somewhere.

What would you do? We have no mortgage, I have a DB teachers pension of around 10K a year as it stands and a tiny DC workplace pension of about £25000 currently. 

dunstonh

He has £20,000 in Zurich Managed Equity and Bond AP, its an older plan and it has no online portal so I'm going on his minimal paperwork that shows fund charges as 0.13% but I'm sure I'm missing something here.

AP indicates it comes from (or is based on) a policy from the old Allied Dunbar days.

Allied Dunbar plans were damned expensive.    But the charges were mostly loaded on the contributions rather than the annual management charge.    So if you already have money in the plan, its had the damage from the charges and has a much smaller deduction annually.    You just wouldn't add to it again.      However, there were also versions that had capital and accumulation units where the annual charge may appear low but the capital units will erode in time.    They can be very complicated multi-charge plans where you really need software to work out the real costs.

It seems to me that he wouldn't gain from combining his pensions but I'm sure I'm missing some fees somewhere.

Royal London plans usually have fund based discounts.  i.e. several tiers where if the value is above a certain amount, the charge on the whole balance is reduced.

What would you do?

That is not a good question as you have posters here who are experienced investors, professional investors or complete newbies.   What "they" may do may not be suitable for your husband.

At the end of the day, two of the plans are similar and one is likely to be obsolete.   The difference in charges is not likely to be significant but it will more likely boil down to functionality and which he likes best and which has the most suitable investment options.

sgun

Thanks, I was kind of thinking along the same lines, and as he is totally hands off when it comes to finance I'll just tell him to leave them where they are for now. I dont need another thing to have to manage on top of all our other finances!

Albermarle

sgun said:

Thanks, I was kind of thinking along the same lines, and as he is totally hands off when it comes to finance I'll just tell him to leave them where they are for now. I dont need another thing to have to manage on top of all our other finances!

Just be aware that although leaving the money with 3 pension providers is probably not a big issue, how the money is invested in those 3 pensions is more important.

LHW99

Could be worth estimating what you need to live on as a couple at retirement, and then see how much the existing pensions plus SP would cover that.

(Have you both checked your SP forecasts?)

sgun

LHW99 said:

Could be worth estimating what you need to live on as a couple at retirement, and then see how much the existing pensions plus SP would cover that.

(Have you both checked your SP forecasts?)

Full SP in forecasts, we'll have enough to be comfortable unless anything else goes tits up in the global markets. Albermarle said:

sgun said:

Thanks, I was kind of thinking along the same lines, and as he is totally hands off when it comes to finance I'll just tell him to leave them where they are for now. I dont need another thing to have to manage on top of all our other finances!

Just be aware that although leaving the money with 3 pension providers is probably not a big issue, how the money is invested in those 3 pensions is more important.

Yes definitely need to have more of a look at this. Doesn't seem like much between them atm. Thanks all.

FIREDreamer

I combined all my DC into a single SIPP. More for simplicity and convenience than anything else. 

My deferred DB were left well alone.