How much do you know about your pension?
Many people have pension funds that were probably taken out a number of years ago that no longer match their needs. This could be down to either a change in personal circumstances or alternatively, because better pension schemes now exist with other companies that were not available or around at the time.
It is therefore advisable in a lot of situations to transfer to an alternative pension plan that can offer much lower charges and a greater range of investment options. The main reasons for considering a pension transfer are:
It is not untypical for older pension schemes have a 5% charge applied to each contribution made, plus annual charges of 1.5% or even higher. It is now possible to utilise pensions that offer no charge on each contribution plus annual charges that in many cases are significantly below 1%.
A saving of just 0.5% each year on a £30,000 fund is £150 per annum. Compounding this over how many years you have until retirement can save thousands of pounds in charges, as well as giving you a larger fund, sometimes providing a fund hundreds of thousand pounds better. This can make a massive difference to your income in retirement, by simply switching providers.
Wider Investment Options
A number of pensions offer access to only their own extremely limited range of investment funds, sometimes just one fund. In most cases it can be fewer than 10 funds. It is now possible to structure your pension so that you have access to a wide range of funds, not only from the provider of the pension wrapper, but also from a range of external fund managers. You may therefore decide to have say 5 funds; all managed by different companies i.e. Fidelity, Jupiter, Newton, Schroder, Invesco Perpetual etc. and all within one pension umbrella. This can quite often be achieved at a lower cost than you are currently paying to access only one company’s limited range of funds. Furthermore you can have a switching facility between these funds
Call Fair Advice now on 0800 4880098 for free advice on your pension.