pension pots

Eddiebeef

In about 6 months time I will be retiring full time. Ive had a free consultation with a financial advisor from St. James Place. Ive got two pensions one is crystallized with Royal Lomnon. And the other is still my workplace pension with Legal & General. The advisor is looking at combining the two and make the best for me or should i say both of us. My concern is the 1.5% per annum handling cost. Any advise on what i should do would be greatly appreciated.

xylophone

financial advisor from St. James Place.

You are sure that you need an adviser?

If so, you might want to check out an Independent Financial Adviser before going with SJP?

https://adviserbook.co.uk/

Tick "confirmed independent" then other options required when the menu comes up.

Marcon

Is there a reason why you're not using an independent financial adviser?

Gary1984

I think you should see an independent financial adviser and keep well away from SJP.

Did they say what was wrong with keeping them where they are? Or transferring one into the other? What are the charges with the existing schemes? 

Pat38493

Eddiebeef said:

In about 6 months time I will be retiring full time. Ive had a free consultation with a financial advisor from St. James Place. Ive got two pensions one is crystallized with Royal Lomnon. And the other is still my workplace pension with Legal & General. The advisor is looking at combining the two and make the best for me or should i say both of us. My concern is the 1.5% per annum handling cost. Any advise on what i should do would be greatly appreciated.

You might want to search up some of the recent threads about SJP - they are considered by quite a few people on these boards to be expensive, and also I think they try to lock you in with exit charges which most IFA and providers don't do.

Eddiebeef

The more i hear about SJP the more my mind is being made up about not using them. Ive used IFA and he swanned away with a nice cut of my pension and the pot he chose has performed abysmally with Royal London, probably to do with a large chunk of the investment in UK equities. He sounded very confident at the time about its future performance but what do these IFA'S know really? His hourly rate i would on a par with a premiership footballer. 

dunstonh

 Ive used IFA and he swanned away with a nice cut of my pension and the pot he chose has performed abysmally with Royal London, probably to do with a large chunk of the investment in UK equities

RL offer no funds which could be considered abysmal performers.  Most IFAs using RL would use the Governed portfolio range or the tracker lifestyles.   UK equity hasn't done badly. 

He sounded very confident at the time about its future performance but what do these IFA'S know really?

more than you

Performance averages out over the long term.  i.e. 15+ years.   Short term periods can be negative, positive or flat.    The last 5 years have been the volatile period of the cycle (a global pandemic, Brexit, a war in Europe, energy crisis and inflationary crisis - each of those would normally be a 1 in 8 year event.  Not 5 in 5 years).

Bigger losses have occurred in the last 25 years though.  Its just this one is playing out longer than all but one of them. (2000,2001 and 2002 resulted in three negative years in a row before doubling over the following 5 years).

short term ups and downs are normal.  Looking at short term ups and downs and thinking those are normal is what is wrong.

His hourly rate i would on a par with a premiership footballer. 

If only that was true.     £200k a week on a 35 hour week is £5,714 an hour.

My concern is the 1.5% per annum handling cost

1.5% is not the true cost.  Its more than that.  SJP reps often just use the AMC and dont include transaction charges.   Plus, their initial charges are the thing that really sting.

And your RL pension is likely to be a lot cheaper (most are in the 0.4%-0.45% range before profitsharing and have better investment options.  Despite your lack of understanding.

Eddiebeef

Thanks for the reply. I would like to transfer my RL pot into the L&G pot because the L&G pot does better. But the RL pot has been crystallised and won’t be accepted.
I’m wondering when the L&G has been crystallised does that change things?

dunstonh

hanks for the reply. I would like to transfer my RL pot into the L&G pot because the L&G pot does better.

Over what period?      2022 was a year when bonds were rubbish, cash was good and equities a bit wobbly.    So, the fund with the least bonds and most cash or equities would be best.  That has nothing to do with the provider but the choice of funds you had that year.

2023 will be different.  as will 2024 and so on

L&G will have a fund range that covers all the asset types just as RL.  Changing provider because of perceived differences in performance is not the right way of doing it.

But the RL pot has been crystallised and won’t be accepted.

Which suggests the L&G pension does not support drawdown and cannot handle crystallised funds.

Eddiebeef

L&G does support drawdown. I can compare directly with the L&G and RL and over the past 2 years the L&G pot has gained not lost like the RL pot...fact. Its not perceived.

dunstonh

 I can compare directly with the L&G and RL and over the past 2 years the L&G pot has gained not lost like the RL pot...fact. Its not perceived.

If L&G supports drawdown then why wont it accept crystallised funds?  (using drawdown turns uncrystallised funds into crystallised funds)

You have compared your current funds over 2 years.   What are the differences between those funds in the assets they hold?     Chances are the funds are invested totally differently but both L&G and RL offer different funds.     In the last 2 years, the lower risk assets took a hammering.  So, any fund that was higher in lower risk assets suffered a higher loss than those that are lighter in lower risk assets.      Over those two years, equities are up. So, any fund that was higher in equities, would be higher than a fund that had less.   

Just because RL has gone down over 2 years doesn't make the RL pension worse than L&G.   

You don't compare the quality of a pension by the funds you are in because you can alter the funds within the pension.        However, you need to be careful altering them because of a loss in the short term as its the long term performance that matters.  If you go up and down the risk scale chasing gains, you are more likely to end up chasing losses.

Currently, you are incorrectly reviewing the pensions at provider level because of your perception of quality at fund level.