Charges carry on biting into pensions
Sunday 01 October 1995
Charges remain hugely variable and generally high. They can take up to a third of the money you might accumulate in your pension pot over 25 years, says a survey in this month's Money Management magazine. The average charge reduction is closer to a fifth, and the figures have barely changed since last year. In some cases, a Personal Equity Plan might produce better overall returns even though pensions carry more tax breaks.
Money Management names Eurolife as the highest charger for a personal pension taking monthly contributions. The cheapest is Equitable Life. For someone saving pounds 200 a month for 25 years the difference could translate - very roughly and assuming the same investment performance - into a pension of pounds 18,000 a year from Equitable and pounds 14,000 from Eurolife.
Higher charges are fine, though, so long as that company invests your money significantly better than a cheaper rival.
Money Management gives a number of companies "five stars" for being best buys. These have achieved good overall performance and have low charges. For people paying a monthly premium it names Equitable Life, Norwich Union, Prudential, Scottish Amicable, Rothschild Asset Management, Professional Life and Winterthur. For people investing a lump sum it names AXA Equity & Law, National Mutual, Norwich Union, Sun Alliance and Professional Life.
But these tips should only be a starting point; good past performance will not necessarily continue, and charges can rise once you have signed up. And the named "best buys" assume certain levels of premium. You should also check that the pension plan is flexible - for example, what happens if you want to stop paying monthly premiums? - that the company is financially strong, and that the service is good; pension companies have an appalling record for administration and incomprehensible paperwork.
elephant appealThe first 23 lots in our charity auction have now gone. But there are 22 more still up for grabs
From rainforests and reefs to beaches and boat trips
The Silicon Valley awards which treat scientists like rockstars
comedy'Fresh Meat' star sees off stiff competition from Alan Carr, David Mitchell, Graham Norton, Lee Mack and Sarah Millican to win top prize
Mystery of Epping Forest 'big cat' is solved
North Korea: First Kim Jong-un orders execution of uncle - now it emerges that victim's wife was involved in decision to execute him
Australia incest case: Deformed children found in remote farming community after generations of inbreeding
Woman who miscarried in private prison 'made to clean up after herself,' court told
Fox News presenter tells viewers it is a 'fact' that both Jesus and Santa Claus are white
- 1 Italian court annuls prison sentence for elderly paedophile after 11-year-old victim tells investigators in Catanzaro that she loves him
- 2 Australia incest case: Deformed children found in remote farming community after generations of inbreeding
- 3 Woman who miscarried in private prison 'made to clean up after herself,' court told
- 4 Physicists discover 'clearest evidence yet' that the Universe is a hologram
- 5 Fox News presenter tells viewers it is a 'fact' that both Jesus and Santa Claus are white
- < Previous
- Next >
iJobs Money & Business
£40000 - £60000 per annum + Bonus + Benefits: Harrington Starr: Risk Managemen...
£Attractive Package: Citifocus: This is a new role offering the successful can...
£250 - £300 per day: Harrington Starr: Help drive the design, utilization and ...
£32000 per annum: Harrington Starr: Desktop Support (client facing, 1st/2nd Li...