My Pension is useless
Mar 21st, 2007 by complex001
Many people say that their pension is useless and hasn’t done well. This is likely to be for one of two reasons. Either the costs and charges of running that pension are too high or the fund performance is not very good. There is no excuse for this happening as you can do something about it.
Firstly the newer pension contracts that have come out since stakeholder pensions were introduced have substantially reduced the costs of running a pension. No more do you have to pay bid and offer costs, monthly marketing charges and entrance/exit charges. The new contracts simply have an annual management charge and no other charges so if you do want to move your money away at some point there are no penalty costs to do so.
Secondly a number of schemes out there allow you to use outside fund managers to look after your pension. These will in general do a much better job than the internal funds that insurance companies provide. Always check on the advice if you are simply recommended to go into an insurance company’s managed fund. This is often regarded as a default fund and is unlikely to perform well as other funds that are available.