Repension?

pillsbury33

Hello there

Can anyone help me? I took out a Stakeholder Pension with Standard Life 6 years ago through my former employer. After leaving the country for some time and then leaving the employer I left the pension dormant for 3 years having paid in for 2 years and having contracted out of S2P. Having decided to reactivate payments a few months ago I contacted the FA appointed by the company. I was immediately advised that they only deal with present employees and I would have to organise payments myself. Fair enough, although they would not tell me if they had been taking commision for the last 3 years.

I contacted SL who were happy to assist and asked that they register themselves as my FA. I agreed but stated I had no intention of paying them commision as they would do nothing to earn this. I was told there were no extra charges to me. The SL advisor seemed a little too keen for me to do this which got me suspicious. Have I done something wrong? Should I be looking at the Repensioning article? Am I paying someone money for nothing. I'm sorry for the scant details but the whole pension thing is going over my head.

Thanks alot. If anone needs more details I can probably dig them out.

dunstonh

Fair enough, although they would not tell me if they had been taking commision for the last 3 years.

Doesnt matter if they did. However, you werent making any contributions so there wouldnt be any.

I contacted SL who were happy to assist and asked that they register themselves as my FA. I agreed but stated I had no intention of paying them commision as they would do nothing to earn this. I was told there were no extra charges to me. The SL advisor seemed a little too keen for me to do this which got me suspicious. Have I done something wrong?

Yes you have. You have reappointed the agency from an independent to a tied insurance salesman. It doesnt change the contract in any way and if there is any commission generated on the contract (such as you restarting payments) then Standard life's rep will get the credit for it.

Should I be looking at the Repensioning article?

Depends on what you want to achieve with your pension. If you are still out of the country, you may not be able to change the pension contract unless you go to an IFA that has opted in to MiFID or you come back to the UK to do the transaction face to face.

Am I paying someone money for nothing.

If you are not making contributions then no-one is being paid anything.

pillsbury33

Thanks Dunston H :T

But I am now back in the country and paying in £300 per month. I also have the option of paying in a lump sum. I thought if I repensioned (if I read the article correctly) I would no longer pay the commission? Is this right?

dunstonh

pillsbury33 wrote: »

But I am now back in the country and paying in £300 per month. I also have the option of paying in a lump sum. I thought if I repensioned (if I read the article correctly) I would no longer pay the commission? Is this right?

Changing the agency from an IFA to an insurance rep isnt repensioning. That is just changing the servicing rights. By then paying £300pm into the pension, you have just generated a commission to the insurance rep.

£300pm into a stakeholder is largely wasteful. What fund recommendations did you get? What investment strategy was recommended? How does this fit with your risk profile? Why was a stakeholder recommended over a personal pension or SIPP?

Do not get too paranoid about the charges. Going zero commission on a standard life policy will save you about 0.3% a year in charges. There are providers out there who will pay an IFA full commission and save you up to 0.6% a year in charges compared to a 1% stakeholder.

You are paying into an investment. The most important part is the quality of the investments and how you invest. a 0.3% p.a. charge is nothing in the scheme of things. For example the FTSE100 closed up 1.27% on Friday in just one day. The 0.3% saving is over 365 days. Its neglible compared to investment potential.