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    • Bianchiintenso
    • By Bianchiintenso 11th Jan 18, 1:01 PM
    • 46Posts
    • 4Thanks
    Bianchiintenso
    Pension charges clarification
    • #1
    • 11th Jan 18, 1:01 PM
    Pension charges clarification 11th Jan 18 at 1:01 PM
    I wonder if anyone can help, I'm about to make decisions on my pension going forward, but Zurich aren't being particularly helpful in relation to clarifying the charges, they send a sheet explaining their charges, which to me is difficult to get an accurate answer when percentage accuracy is key . My workings out come to the following conclusion,that in total I am being charged a total 1.35% pa.
    Equity (accumulation) fund 0.9%
    Equity (capital) fund 4.4%
    Managed (accumulation) fund 0.92%
    managed (capital) fund 4.42%
    Bid/offer spread 5.0%
    Allocation units cost 4.0%
    plus expense deductions and management charges.
    For example a pot of 250,000 the total charges appear to be 3320
    which equates to 1.35% charges?
    or have I done something fundamentally wrong here?
    Thanks in advance for any input
    Last edited by Bianchiintenso; 11-01-2018 at 1:02 PM. Reason: error
Page 1
    • Bianchiintenso
    • By Bianchiintenso 11th Jan 18, 5:12 PM
    • 46 Posts
    • 4 Thanks
    Bianchiintenso
    • #2
    • 11th Jan 18, 5:12 PM
    • #2
    • 11th Jan 18, 5:12 PM
    Have spoken to Zurich, and bizarrely they said that they don't see a fund charge of 4.42% for the equity capital fund, I said it's on your website under the relevant sedol code, she went away for 5 minutes and said sorry there's a system problem we can't load it, the fund charge for that one is 1.75%. Ahh OK, in that case can you tell me what charges you made against my pension last year. "No I'm sorry we can't do that, you'll have to work it out for yourself".
    it's a sorry going on with conflicting information and a reluctance or inability to tell a client what they actually charge them.
    • sandsy
    • By sandsy 11th Jan 18, 5:24 PM
    • 1,338 Posts
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    sandsy
    • #3
    • 11th Jan 18, 5:24 PM
    • #3
    • 11th Jan 18, 5:24 PM
    Go back to them and tell them it's their job to tell you. This is the 30 year old contract you mentioned in another post?

    FCA did a report on how firms should treat policyholders of old contracts a couple of years back (https://www.fca.org.uk/publication/thematic-reviews/tr16-02.pdf):

    "We expect firms to ensure that they meet the information needs of all their customers on an ongoing basis"

    "So in their communications firms should include, for example, details on the performance of the product, its value and the impact of fees and charges."

    "For unit-linked (non-profit) policies, charges incurred over the period in monetary figures. This includes setting out, in addition to the aggregate charge, a breakdown of the major components and the charge to the customer for benefits such as life cover and guarantees."

    It's not sufficient for them to tell you to do it yourself.
    • Bianchiintenso
    • By Bianchiintenso 11th Jan 18, 5:35 PM
    • 46 Posts
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    Bianchiintenso
    • #4
    • 11th Jan 18, 5:35 PM
    • #4
    • 11th Jan 18, 5:35 PM
    They obviously think it is, I've spoken to 3 different 'advisors' over the last 3 weeks and they keep saying they'll go through charging plan with me, but can't tell what percentage i pay them per annum, it got a little heated and she said she would get in touch with someone to see if they could but she wouldn't promise. She did send me a pdf through that showed the annual charges on 'new' products, can I move to one of them for no fee I asked, Yes she said. I certainly get the impression that I could have been paying much lower fees for years but have never had the advice or information from Zurich. A word of warning to anyone in the same boat and dithering, do something NOW!
    • Malthusian
    • By Malthusian 12th Jan 18, 9:17 AM
    • 4,255 Posts
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    Malthusian
    • #5
    • 12th Jan 18, 9:17 AM
    • #5
    • 12th Jan 18, 9:17 AM
    It's impossible to check your workings when we don't know how much you have in each fund. That said the figure you have arrived at is certainly plausible.

    Is there a penalty on transfer? A more modern pension will almost certainly be cheaper, even if your figure of 1.35%pa is wrong. However, there is likely to be a transfer penalty on the capital units which may wipe out any ongoing savings.
    • Bianchiintenso
    • By Bianchiintenso 12th Jan 18, 9:34 AM
    • 46 Posts
    • 4 Thanks
    Bianchiintenso
    • #6
    • 12th Jan 18, 9:34 AM
    • #6
    • 12th Jan 18, 9:34 AM
    It's impossible to check your workings when we don't know how much you have in each fund. That said the figure you have arrived at is certainly plausible.

    Is there a penalty on transfer? A more modern pension will almost certainly be cheaper, even if your figure of 1.35%pa is wrong. However, there is likely to be a transfer penalty on the capital units which may wipe out any ongoing savings.
    Originally posted by Malthusian
    There is a 800 charge to transfer, Zurich appear to have the 'same' funds available for 0.15% that I can transfer into, just a tad peeved that A) I have not been financially savvy enough in past years to move and B) Zurich or IFA never informed I was paying over the odds
    • dunstonh
    • By dunstonh 12th Jan 18, 10:22 AM
    • 93,036 Posts
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    dunstonh
    • #7
    • 12th Jan 18, 10:22 AM
    • #7
    • 12th Jan 18, 10:22 AM
    There is also the potential issue of whether the charges change when you make the plan paid up vs contributing to it.

    Old multi-charge plans from that era are a pain to work out an equivalent AMC. It usually requires software.

    B) Zurich or IFA never informed I was paying over the odds
    Zurich wont tell you. They dont have an in-house distribution firm on the life & pensions side. Although they do sometimes pass data to their tied network.

    Did you employ an IFA to look at the pension? If you didnt then how would they inform you? If you did, then what did they say about it?

    Also, with many of these plans, the high transfer costs (prior to the recent rule change) meant that it was usually not viable to transfer them out. Making them paid up and leaving them where they were was usually best.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Bianchiintenso
    • By Bianchiintenso 12th Jan 18, 10:33 AM
    • 46 Posts
    • 4 Thanks
    Bianchiintenso
    • #8
    • 12th Jan 18, 10:33 AM
    • #8
    • 12th Jan 18, 10:33 AM
    There is also the potential issue of whether the charges change when you make the plan paid up vs contributing to it.

    Old multi-charge plans from that era are a pain to work out an equivalent AMC. It usually requires software.

    Zurich wont tell you. They dont have an in-house distribution firm on the life & pensions side. Although they do sometimes pass data to their tied network.

    Did you employ an IFA to look at the pension? If you didnt then how would they inform you? If you did, then what did they say about it?

    Also, with many of these plans, the high transfer costs (prior to the recent rule change) meant that it was usually not viable to transfer them out. Making them paid up and leaving them where they were was usually best.
    Originally posted by dunstonh
    I've tried 3 local advisors, One I've mentioned before, just wants to tie me into getting a nice % for the rest of my financial life, the other two wouldn't work for a fee, they said they didn't need to, but if I wanted them to manage my pension they'd be interested
    I fear you're right, do you think a simple question to them
    "Am I paying your lowest rates for these particular funds, if not can you move me to it" might work? I suspect they will say "sorry we can't tell you that - see a FA" and so it goes...
    • dunstonh
    • By dunstonh 12th Jan 18, 10:56 AM
    • 93,036 Posts
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    dunstonh
    • #9
    • 12th Jan 18, 10:56 AM
    • #9
    • 12th Jan 18, 10:56 AM
    've tried 3 local advisors, One I've mentioned before, just wants to tie me into getting a nice % for the rest of my financial life, the other two wouldn't work for a fee, they said they didn't need to, but if I wanted them to manage my pension they'd be interested
    I understand. However, until you employ the adviser, they are not going to be in a position to give advice. Until they get the details from Zurich, analyse it and then put it through the software (as multi-charge plans more often than not need software to get you a simple annual equivalent), you really cannot tell how it is going to come out.

    "Am I paying your lowest rates for these particular funds, if not can you move me to it" might work? I suspect they will say "sorry we can't tell you that - see a FA" and so it goes...
    The question is one of advice. So, they would need the advice regulatory permissions to answer it.

    And remember, that the fund charge mentioned higher up on this thread is one that needs a platform. So, it's not the only charge.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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