UK Pension Contributions

[whitedesire]

If any UK person is paying into a UK pension scheme, they are probably aware/unaware that commissions paid each year to financial advisers even if the pension is froze.

There was an advert/article in the London Evening Standard promoting a service, Ivan Massow (not sure if any one has heard of him, but he is a well known financial consultant "on the scene"). The service is about paying as much as 1.5% in commission fees each year from your pension fund even if it is static (known as trail commission fees to Independent Financial Advisors). The fees are supposedly paid for advice "they" give you each year about your investments. If you are happy about the advice you get about your investments then fine, but generally speaking the only time I have known to be in touch with a financial adviser regarding an existing product is when you commence it and sign on the dotted line, then it's the end, you never hear from them again. They claim to be able to get these fees back from over the years, and each year you have a pension fund (or an investment for that matter) until you retire, without affecting your "pension pot". This amount can add up to a considerable amount. Up to 1.5% of your pension pot each year for say 25 years, that is a tidy sum of money. The site is: http://www.paymemy.com/mission/

Another company is: http://www.earnyourowntrail.com/

Here is an article from the FT about it: http://www.ft.com/cms/s/2/00f3de78-d7c8 ... z1dLIuHDb0

Have a look, and READ the ups and downs of this, also do your research, it is known as Trail Commission - there is a some info on the internet about it.

[Jun]

Good advice to check your pension charges.

Ideally, you have made your decisions without ever consulting an IFA, so that drag on your pension fund will be eliminated.

However, make the wrong choice & your pension fund company might easily charge up to 2% a year in annual management charges.
Then the money may be invested in funds which incur further management charges.

Now if you have a fund, with 20 years to go until retirement, a 2% annual charge will take reduce your pension fund by 33% compared with a zero charge scenario.
That's optimistic, but even cutting the charges by half can have an enormous effect on the pension.

[whitedesire]

This is exactly what I'm on about Jun, the amounts are considerable indeed. Get your point if you haven't been in touch with a IFA, but most people will have had pensions that are froze from previous companies they worked for, which do involve IFAs. If you have set up your own pension fund and "do it yourself" I suspect not, but I don't think there are many people out there who understand where to put money in respect of pension funds.

This also applies to other investments too, I suspect endowment policies, well anything really that involves IFAs.