Old DC Pension Schemes from previous employers

exvirilis

Hi all

I've recently been looking at old DC schemes still with companies from previous employers like Royal London and Standard Life .   Some of these go back quite a few years and i thought I'd better look at annual charges.  

One charges me 0.44% per year, another charges 0.35%.  I'm conscious of the compounding effect of charges, so I have a couple of questions:

To what extent would you consider consolidating to a different company based on fees alone?  Presumably that's a product of the number of years left (i'm 55 and probably 5-10 years from retirement, dependent on equity performance).  My assumption is that the funds they invest in are broadly similar.

Are those two fees indicative of what is reasonable?   Research seems to suggest anything between 0.1 and 1%, which is not very helfpul.  I have a sipp with Aviva (for some reason i'm really struggling to find out what they charge me for the platform in the app) and was wondering if it might make sense to just transfer from the old companies and into the SIPP, just then buying a low fee vanguard index fund?

dunstonh

To what extent would you consider consolidating to a different company based on fees alone?  

When the charges are a lot higher than what you have said yours are.  Anything below 0.5% for product and funds is fine.

Presumably that's a product of the number of years left (i'm 55 and probably 5-10 years from retirement, dependent on equity performance).

It would be if there were exit charges or initial charges but where there isn't any, then number of years until full withdrawal is not a concern.

My assumption is that the funds they invest in are broadly similar.

Not a safe assumption to make.   

Research seems to suggest anything between 0.1 and 1%, which is not very helfpul.  

Seems like a reasonable range.  You are not going to get many below 0.3% but it is possible and 1% would be the ballpark if you are using external managed funds.

I have a sipp with Aviva (for some reason i'm really struggling to find out what they charge me for the platform in the app) and was wondering if it might make sense to just transfer from the old companies and into the SIPP, just then buying a low fee vanguard index fund?

As it's a SIPP,  you will receive an annual costs and charges disclosure.  So, look at the last one issued in the document library.   SIPPs are more transparent on charges than personal pensions and stakeholder pensions.  So, it should be easy to find.  

Chances are you will be increasing your charges or making little or no difference based on your proposal to move them to the SIPP and a Vanguard index tracker  (note that Vanguard do not offer the best trackers in many areas.  They have one of the widest ranges and sometimes are the only tracker available in a certain area but in some areas, they are not competitive).      That said, it still may be worth it.

exvirilis

Thanks that's really helpful - looks like then the best route is just to leave them where they are

Albermarle

exvirilis said:

Thanks that's really helpful - looks like then the best route is just to leave them where they are

Just be sure that the charges you mention cover both the pension management charges ( often referred to as the platform charge)  and the investment fund charges.
In the type of pensions you mentioned they are often combined ( but not always), and in that case as said the charges are not unreasonable.