Are admin Fees, eating away at my pensions!

Raqx92

I'm 32 and have had a quite a few jobs that have all auto-enrolled me into different pension schemes (People Pension, Aviva, Now Pension, NEST, Civil Service Pension and Royal London).

Each has around £800 - £2000 accumulated in them and once I leave the job I stop paying into them and it seems like there just being eaten up by admin fees.

I thought to consolidate them in to one pension company but also discovered that a lot of them charge for transferring. Should I keep them where they are and let admin fees eat away at the contents or should I transfer them despite the transfer fee? 

I've seen Pension Bee and Nutmeg don't charge for transferring but how reliable are these companies? I'm worried about losing what little pension I have left. 

Has anyone successfully transferred there pension into one? Was it worth it or do you wish you left them where they were? 

R 

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Pensions, annuities & retirement planning — MoneySavingExpert Forum

gm0

The forum linked above has a lot of useful information for you.

Each scheme will have its fees - higher or lower than others.  Typically in (at least) two parts.  1) An annual fee for the scheme.  2) A fee for the investment fund(s) that the money is currently invested in.

While the fund management fees (the second part) vary - you will pay a version of them anywhere you go.  And people mostly pick investments i.e. funds on how aggressively and long term they are thinking not just on the cheapest fund management charge.  Having chosen what you want to invest in - you can of course shop around for a cost effective way to do it.  They do vary.

Consolidating several small pensions can help more with the first part - scheme/product charges. Paying one of them especially if it is a fixed fee - may well be better for you than paying several separate fees.

There is a good market of pension providers now - some even offer cashback to come to them which offsets ongoing fees for a short while.  

Some charge a fixed fee annually. 
Some a % fee annually. 

And some charge more to change investments i.e. to trade in and out of funds, and some charge less - so how often you do that also plays into which one is the better choice - for you.

There are companies like the two you mention who market themselves as modern and digital and as pension consolidators who do provide a "friendly" service to tidy up. 

But be in no doubt they are usually (for most people) not the cheapest long term places to hold a pension. 

Some people like the convenience their service and simplicity around investment choices.  And others want to optimise for cost, or wider investment ranges. The 2nd group will not be found at Nutmeg and PensionBee.

You can get a view of fees online at each provider. 
Not always easy to digest
But by regulation fees/charges are displayed fairly prominently.  So go and take a look at a few others websites - iWeb (a low cost reputation provider).  Or Fidelity or Vanguard as other mid-market examples. These can illustrate the difference for you.  And help you understand the extent to which the current trail of small pensions is expensive or not.

Good luck

Albermarle

Raqx92 said:

I'm 32 and have had a quite a few jobs that have all auto-enrolled me into different pension schemes (People Pension, Aviva, Now Pension, NEST, Civil Service Pension and Royal London).

Each has around £800 - £2000 accumulated in them and once I leave the job I stop paying into them and it seems like there just being eaten up by admin fees.

I thought to consolidate them in to one pension company but also discovered that a lot of them charge for transferring. Should I keep them where they are and let admin fees eat away at the contents or should I transfer them despite the transfer fee? 

I've seen Pension Bee and Nutmeg don't charge for transferring but how reliable are these companies? I'm worried about losing what little pension I have left. 

Has anyone successfully transferred there pension into one? Was it worth it or do you wish you left them where they were? 

R 

Pensions are normally invested in the financial markets so will go up and down in the short and medium term, but hopefully will grow in the long term. Compared to these movements the charges are relatively peanuts.
Most of the pensions you mention charge around 0.5% a year ( some a bit more and some a bit less) so not exactly being eaten, and very small compared to the fact that the investments. in the pension could easily go up or down by 20% in a year.
I thought to consolidate them in to one pension company but also discovered that a lot of them charge for transferring
Charging for transferring out is relatively rare, and none of the pensions you mention do this as far as I know.

However the Civil service pension is completely different from all the other ones, being a defined benefit scheme. Public sector pensions are much better than typical private sector ones.

Mark_d

I have not transferred my DB pension but I have successfully transferred all my DC pensions in to the arrangement provided by my current employer (with Aviva).  I believe that this is simplest, most efficient, and does not mean losing out on any benefits.  i don't believe I needed to pay any fees for transferring.

penners324

The only 1 of those that charges is the civil service scheme.

All the others can be transferred into one.

I've done this into PensionBee  very happy with them. I'm in 1 of their higher risk investments.

dunstonh

I thought to consolidate them in to one pension company but also discovered that a lot of them charge for transferring.

Most of those do not charge for transferring out and none of them charge for transferring in. Indeed, not sure any of them do unless they are old plans with an MVR or conventional with profits plans.

Should I keep them where they are and let admin fees eat away at the contents or should I transfer them despite the transfer fee? 

We cannot answer as you havent told what you are comparing and how much is involved.

I've seen Pension Bee and Nutmeg don't charge for transferring but how reliable are these companies?

Both of those are more expensive than some of the pensions you list, if not all of them.

Marcon

penners324 said:

The only 1 of those that charges is the civil service scheme.

No it doesn't charge - but it can't be transferred to a scheme where benefits can be 'flexibly accessed'. In practice, that the means it can normally only be transferred to another defined benefit scheme.

jamesd

Forget consolidating the civil service one.

For the rest it has been prohibited to have leaving charges for new pension contracts for a while now. Transferring in rarely has charges, more often a bonus reward payment to you for doing it.

Prime targets for a move are those which have a fixed charge instead of a percentage. That type can be great with bigger pots but it'll eat small ones.

What I suggest you do is ask Hargreaves Lansdown to transfer all but CS to them, collecting their transfer in bonus. After a year you can keep the bonus if you transfer out. HL's 0.45% platform charge, plus fund charges, is at the higher end of percentage based plans but their service is good for smaller pots. Doing this uses them for what they do well, then you can move on to somewhere cheaper 

Or you could start somewhere cheaper. HL are just particularly well known here.

Albermarle

What I suggest you do is ask Hargreaves Lansdown to transfer all but CS to them, collecting their transfer in bonus

If you do this, just make sure you register on the website for the cashback bonus, before starting the transfer process.

Raqx92

Thanks so much for the advice everyone, I've only just started really looking into my pensions so it's all super helpful and much appreciated. You're right @gm0 the information has not been the easiest to digest but I'm feeling a bit more reassured that transfer fees aren't necessarily the norm for most pension focused companies so, I probably just need to shop around a bit more.

It was Skipton (who I have an ISA with) who said they wouldn't even consider transferring my pension if they we're below £10,000 as the transferring fees would so high that it wont be beneficial. (Or at least that's what I took from the conversation). Perhaps as a building society they've different polices so I think I'll stick with one of the companies I already have a pension with or that specialise in the area. I've never heard of Hargreaves but I'll look into them seeing as people are recommending them. 

R