Pension Charges

H

hitec

Guest
I have been made redundant about two years ago and have transferred my pension to New Ireland.I am 45 yyrs old.
I have made no new contributions since and I now want to start to make monthly contributions. I have met with the New Ireland people and they have told me that 97% of my ongoing contributions will be invested in the fund. They are also advising me to transfer my fund (which is currently in gilts and cash) to an Asset Protection fund which has a 1% management charge.
I have been looking at Quinn Life and see that their funds have a 100% contribution with a 1% management fee. Does it not make sense just to go to Quinn Life as nobody can guarantee that they can generate better performance so why pay more.

Any advice would be greatly appreciated
Hitec
 
As a very general rule, you're absolutely correct to be seeking out the lowest charges on any financial product as relative fund performance cannot be predicted in advance.

That said, make sure you're comparing like with like, in terms of more than just charges. For example: -

  • Advice. Lowest charges tend to be available from execution-only providers or brokers. Quinn Life is an execution-only provider. This means you don't get any advice about what product to choose, what funds to choose etc. If you want advice you usually need to pay for it.
  • Choice of funds. Make sure that the available funds suit your aims and risk tolerance.
  • Choice of products. Are you comparing a PRSA with a Personal Pension?
 
I would go with the lower charges. Paying a fixed % every month for advice is questionable as the advice does not guarantee you any better return. If you are willing to do so, then better to take control and educate yourelf in managing your own pension then pay for some advice as you near retirement if needed.

You are 45, pension rules will change many times between now and retirement so advice you get today may well have little relevance in 20 yrs. Many people with DC and ARF funds have seen this recently. If you are willing to take an active role then imho it is best to keep up to date yourself through the pensions board and forums like this.

It's your money, don't be like my dad who in the 1980's blindly give a lot of money to an Irish Life pensons guy who called to the house every month and told him everything was great and to put in more. It was great for the pensions guy. These guys are still around, they just don't call to doors any more.
 
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