Royal London Charges

Qyburn

Hi,

I have a small Royal London pension, formerly what they called a "Group personal pension" receiving contributions from me and my employer. Annual statements have always stated charges as 0.65% which i believe covered everything as it's all Royal London's own funds.

When I left employment they wrote stating "Your plan has now changed from being part of a group pension plan to an individual plan". And further down the document stated "The charges being taken from your plan are unchanged."

All good so far.

However I just made a one off contribution (the infamous 2880/3600) and the documentation confirming this now states charges of 1.10%.

Is this normal, would you expect a RL pension to go up in price after leaving employment and then restarting contributions?

I was kind of swithering about transferring it to a DIY platform, and this might be enough to tip the balance.

I should say I consider this plan as savings, it's not part of our retirement income planning. Its value is just over £6K at the moment. I could take it all without stupid tax impact, but we have enough cash at the moment so would rather leave it in defensive investments.

dunstonh

Is this normal, would you expect a RL pension to go up in price after leaving employment and then restarting contributions?

In the past, group personal pensions could increase the price if you were no longer an active member.  However, that was banned some time back.    

I should say I consider this plan as savings, it's not part of our retirement income planning. Its value is just over £6K at the moment. I could take it all without stupid tax impact, but we have enough cash at the moment so would rather leave it in defensive investments.

The most widely used RL workplace pensions have a 1% charge but gain fund based discounts that bring that percentage down.   A value of just £6k would be 1%.      

However I just made a one off contribution (the infamous 2880/3600) and the documentation confirming this now states charges of 1.10%.

That is higher than the RL default.     Two scenarios can cause that.
1) you are using an external fund rather than internal funds
2) you are not looking at the charges but at the reduction in yield due to charges.   A 1% AMC would generate a 1.1% RIY.

Qyburn

Thanks, the odd thing is it seems to be the single contribution thats triggered the change, or maybe the change only applies to this contribution and not to funds dating back from while I was employed.

This is what it actually says, and for comparison what they said after my one-off last tax year. All the funds are noted RIP which I guess is Royal London Pension, I haven't shown the whole list as there are about 20 but in each case the funds all show the same charge.

Beddie

Just phone them! They're very helpful and will remove all of this guesswork.