Admin Costs Will Deplete My Pension

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LegoGirl_2
LegoGirl_2 Posts: 1 Newbie
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in Pensions, annuities & retirement planning
Hi all,

Just looking for any information/suggestions. I currently have two old pension pots from previous employers. Both have varying amounts in them but not a great deal. I was filing some paperwork and noticed that each year the admin costs are taken out of the ‘pot’ and thereby reducing what is in there. I am pretty sure that at least one of them will be fully depleted by the time I retire (if that is still a thing in the future :p)

Would I be able transfer the pension into a some other pension or savings account?

I wish I had paid more attention earlier as I would have transferred them into the pension scheme my current employer has. But I am out of time on that one.

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  • squirrelpie
    squirrelpie Posts: 963 Forumite
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    Yes, you can transfer them into another pension. For anybody to help you any more, in particular to know whether that's a good idea, you're going to have to give more information about the pensions and about you. Depending on the information you give, you may have to pay for professional advice as well.
  • Dox
    Dox Posts: 3,116 Forumite
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    Given these are 'old' employer pensions, I'm presuming neither is a SIPP? If it is, then you could find yourself with a negative balance and having to stump up money to pay the charges.

    As you are paying charges on these old pensions, they will be DC rather than DB/final salary pensions. Bear in mind that if you transfer them to another DC arrangement, you will still have to pay charges - but modern contracts are based on an annual %age of the value, rather than older style contracts which had things like fixed monthly charges (those could really eat into the value of the pot, especially if it is quite small to begin with).

    A simple stakeholder might fit the bill.
  • SonOf
    SonOf Posts: 2,631 Forumite
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    It is very rare for a modern pension plan to be able to deplete the pension due to fees unless its in a SIPP.

    Most modern workplace schemes are percentage based. i.e. 0.x% of fund value. So, they can never deplete the scheme.

    Why do you think yours would?
  • ffacoffipawb
    ffacoffipawb Posts: 3,593 Forumite
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    SonOf wrote: »
    It is very rare for a modern pension plan to be able to deplete the pension due to fees unless its in a SIPP.

    Most modern workplace schemes are percentage based. i.e. 0.x% of fund value. So, they can never deplete the scheme.

    Why do you think yours would?

    I have seen cases myself (old group schemes) where the fund value is under £1,500 and they are paid up (no future contributions) with a monthly member policy fee of £8.50 linked to National Average Earnings.

    As Dacia would say, you do the maths. :)

    They are actually provided with SMPI projections showing a nil projected fund value. Shocking.
  • jamesd
    jamesd Posts: 26,103 Forumite
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    Dox wrote: »
    Given these are 'old' employer pensions, I'm presuming neither is a SIPP? If it is, then you could find yourself with a negative balance and having to stump up money to pay the charges.
    Going negative looks like a failure to treat the customer fairly so I'd expect it to be closed instead.

    What may be the most used fixed monthly fee pension today is aimed at employer auto-enrolment schemes. Otherwise the widely used regular fee personal pensions or SIPPs tend to be designed for pot over 30k an often more.
    Dox wrote: »
    modern contracts are based on an annual %age of the value, rather than older style contracts which had things like fixed monthly charges
    No, they aren't. Percentage based ones are more common but modern contracts with fees instead are readily available and typically better value for larger pots.
  • wjr4
    wjr4 Posts: 1,131 Forumite
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    What are the charges? Every pension has charges, some more than others.
    I am an Independent Financial Adviser (IFA). Any posts on here are for information and discussion purposes only and should not be seen as financial advice.
  • xylophone
    xylophone Posts: 44,427 Forumite
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    Where are the pensions at the moment?

    What is the value of the pensions?

    What are the charges?
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