Pension consolidation and where to seek advice?

[Craikeybaby]

My current employer are moving us all to a new (better) pension scheme, and I thought now would be a good idea to look at my total pension portfolio, as I've not really paid much attention to it.

Currently I have:

• Old employer pension with Scottish Widows, with over 10 years of contributions - I haven't done anything with this, other than checking I can still access it. So not sure on what fees I am paying etc.
• Current employer old pension, with NEST, with 3 years of minimum contributions - I definitely do not want to keep this one going, but not sure where to transfer to.
• SIPP, with Vanguard, with 3 years of contributions to top up to what I was paying with my old employer. - Chosen for low fees/ease of set up to make sure that I was keeping up with additional contributions.

The new work pension scheme is being set up with Royal London, and we can do additional contributions/salary sacrifice and have more options for funds to invest in, so I'll likely up my contributions from the minimums and stop my contributions to my SIPP.

I would like to consolidate the 3 old pensions, but not sure where, or how to work out where. What is the best way to compare fees etc?

I usually prefer to do things myself, aiming for low fees, after bad experience with an IFA in the past. However, if going with an IFA is going to offset the extra fees I would be happy to use one. I believe that we will be having a call with someone from Royal London/whoever set it up for the company, but I would like to go into that with a better idea of my options.

[mikeiow]

Craikeybaby said:

My current employer are moving us all to a new (better) pension scheme, and I thought now would be a good idea to look at my total pension portfolio, as I've not really paid much attention to it.

Currently I have:

• Old employer pension with Scottish Widows, with over 10 years of contributions - I haven't done anything with this, other than checking I can still access it. So not sure on what fees I am paying etc.
• Current employer old pension, with NEST, with 3 years of minimum contributions - I definitely do not want to keep this one going, but not sure where to transfer to.
• SIPP, with Vanguard, with 3 years of contributions to top up to what I was paying with my old employer. - Chosen for low fees/ease of set up to make sure that I was keeping up with additional contributions.

The new work pension scheme is being set up with Royal London, and we can do additional contributions/salary sacrifice and have more options for funds to invest in, so I'll likely up my contributions from the minimums and stop my contributions to my SIPP.

I would like to consolidate the 3 old pensions, but not sure where, or how to work out where. What is the best way to compare fees etc?

I usually prefer to do things myself, aiming for low fees, after bad experience with an IFA in the past. However, if going with an IFA is going to offset the extra fees I would be happy to use one. I believe that we will be having a call with someone from Royal London/whoever set it up for the company, but I would like to go into that with a better idea of my options.

I doubt if you would ever really know if an IFA will genuinely save you money. Their fees will often mean you can be fairly sure they are costing a chunk over potentially several decades…

You will also never REALLY know whether you have the investment for your risk profile….
I like the logic explained by Lars at https://kroijer.com.
In a nutshell, “buy the world at the lowest possible cost”. Maybe that describes your Vanguard.

Moving them is a fairly simple task for you to do, using “Origo Options”. Generally no cost to you.
The trick is figuring out whether to move….& where to.

Does the Vanguard one perform well enough for you? If so, perhaps you would move the others to it.

First question is whether they have any guarantees attached.
If not, maybe check the Scottish Widows one versus the Vanguard performance over the same period.
If worse, then you could easily move that yourself.

Similar for the Nest one - easier to manage the one left.

I also have an aversion to financial advisors….but if your situation is complex, or you have a ‘fear’ of making the right decisions with large sums of money, I can understand why people use them.
Good luck!

[Somebody]

I moved a couple of old employer plans to RL via the IFA who set up the new RL employers scheme. They prepared reports on cost and performance of old and new, and when I agreed to transfer they charged £250 for each which were taken from the funds transferred. It was worth it for me from the savings in charges, which was 1.2% combined vs 0.29% for RL which is before the annual profit share.

Ask to speak to the IFAs who set up the RL scheme.

[bitchstewie]

Somebody said:

I moved a couple of old employer plans to RL via the IFA who set up the new RL employers scheme. They prepared reports on cost and performance of old and new, and when I agreed to transfer they charged £250 for each which were taken from the funds transferred. It was worth it for me from the savings in charges, which was 1.2% combined vs 0.29% for RL which is before the annual profit share.

Ask to speak to the IFAs who set up the RL scheme.

This is what I would do if it's available and free.

RL and similar providers can be cheaper than DIY SIPP platforms if you get a "group" discount on the pension scheme and costs.

At the very least make sure you're clear on the fees and terms of the pensions i.e. any protected right to access at a particular age.

[Craikeybaby]

Somebody said:

I moved a couple of old employer plans to RL via the IFA who set up the new RL employers scheme. They prepared reports on cost and performance of old and new, and when I agreed to transfer they charged £250 for each which were taken from the funds transferred. It was worth it for me from the savings in charges, which was 1.2% combined vs 0.29% for RL which is before the annual profit share.

Ask to speak to the IFAs who set up the RL scheme.

Thanks, it is good to know that it is worth speaking to them.

[Slow.Patrol]

mikeiow said:

I doubt if you would ever really know if an IFA will genuinely save you money. Their fees will often mean you can be fairly sure they are costing a chunk over potentially several decades…

You will also never REALLY know whether you have the investment for your risk profile….

I can relate to this.

I spent 25 years with the same IFA. Yes my pension went up (at some point I will work out by how much), however, when I decided to start drawing it down as I had retired, I discovered that it was invested with Vanguard via Aviva. Something I could do directly myself. I was paying a fee to a middleman, thinking I was benefiting from their expert advice when in all honesty they were charging me for someone else's advice. At some point I will also work out how much their fees cost me over the 25 years.

It is obvious the Government want to reduce the state pension over the next few decades, but they really need to make private pensions easier to understand.

Random story. I have a copy of my Grandfather's will and probate. He died in 1967. When he started work, pensions weren't a thing. He bought shares with the intention of using the dividends as income. There is a whole page listing all his shares.

[bitchstewie]

Slow.Patrol said:

At some point I will also work out how much their fees cost me over the 25 years.

I would strongly suggest you don't

[Bonefish Blues]

Similar scenario here - it's a worry isn't it!

[9xxNick]

With regard to fees, the providers' websites will give this information.

A list of potential providers can be found on Moneysavingexpert, the Which website and others.

I was in a similar position to yourself a couple of years ago and consolidated to Vanguard. I have no complaints so far - they seem very easy to deal with and the fees are reasonable.

I ceased employing an IFA at the same time. They weren't adding any value or at least nothing in comparison with their fees.

[bitchstewie]

Respectfully the providers websites will often give a fee that isn't what you actually pay.

Many providers give discounts so if you go on the website and look at a fund factsheet it might say 1% but in reality you're paying 0.2% because of the scheme you're on.

Don't go off the headline figures.

Read your own personal paperwork (carefully) or speak to your pension provider.

[craig1912]

I’d transfer the old pensions to your SIPP and up contributions to RL scheme. RL are a decent provider and their fees will be low.
Nothing wrong with employing an IFA for a one off job of amalgamating the pensions.

[bitchstewie]

What would an IFA actually bring to the table though?

I have a couple of old pensions and whilst I'm fine with them where they are I didn't think there would be much more to it than a "please transfer my pension to XYZ" request if/when the time comes to change things.

[craig1912]

bhstewie said:

What would an IFA actually bring to the table though?

I have a couple of old pensions and whilst I'm fine with them where they are I didn't think there would be much more to it than a "please transfer my pension to XYZ" request if/when the time comes to change things.

It depends how confident one is I guess.

Help explain options, fees, risk profile, investment funds etc.

I worked for nearly fourty years in financial services, around a quarter in pensions admin and sales and I use an IFA with my retirement and drawdown strategies. There are some things I just wouldn’t have thought about or how to access (structured products etc.). Originally I had to use an IFA to transfer my FS pension but now he adds value which I believe is worth paying for although for many with simpler affairs I accept an IFA won’t add enough to be worth paying for.

[bitchstewie]

That's fair I was thinking the literal transfer process more than confidence around fees and funds.

[tighnamara]

craig1912 said:

It depends how confident one is I guess.

Help explain options, fees, risk profile, investment funds etc.

I worked for nearly fourty years in financial services, around a quarter in pensions admin and sales and I use an IFA with my retirement and drawdown strategies. There are some things I just wouldn’t have thought about or how to access (structured products etc.). Originally I had to use an IFA to transfer my FS pension but now he adds value which I believe is worth paying for although for many with simpler affairs I accept an IFA won’t add enough to be worth paying for.

Out of interest what are the things the IFA recommended that you would never had thought of

[craig1912]

tighnamara said:

Out of interest what are the things the IFA recommended that you would never had thought of

The use of structured products to provide the income on a regular “guaranteed” basis, reducing cash and leaving more invested, split of investments between lower risk (short term) and higher risk (long term).
Use of “small pots” to maximise TFC.

[9xxNick]

bhstewie said:

Respectfully the providers websites will often give a fee that isn't what you actually pay.

Fair point. I was thinking of the fees charged by potential new providers such as Vanguard when I made that comment, but you are correct in stating that the current fees for corporate schemes can only be ascertained by enquiring directly.

[Bonefish Blues]

Aren't they on the annual statements?

[9xxNick]

Quite possibly, but I don't have any current documentation to check. I think it's fair to assume that the term "enquiring directly" would cover looking at any scheme-specific documentation though.

[eliot]

Somebody said:

Ask to speak to the IFAs who set up the RL scheme.

I did this recently as our company moved to RL too and wanted some advice before consolidating a couple of pensions. I got the impression that the fee was based on how much they thought they could get away with..

Suffice to say after almost two months of in-action I disengaged and found someone local on the 2plan platform and got a far more competitive quote for the same work.