Transferring between personal pension policies could prove profitable

Many pension providers only offer their lowest charges to new customers, leaving existing customers with a much more expensive policy. A simple ‘switch’ – possibly within the same insurance company – could increase your pension fund by £thousands! Its as easy as changing your gas or electricity supplier.

Background

Over the last 10 years or so most insurance companies have reduced the level of fees and charges on their pension policies. This has been driven by fierce competition for new investors.
Lower charges means better value for pension scheme members as a larger part of investment profit remains in the pension fund. 

What difference does it make?

By way of example... a 0.5% reduction in charges means that a fund of, say, £50,000 will benefit the fund by over £250 each year. After 20 years this will add more than £5000 to a pension fund. 
Generally these reduced charges apply only to new policies: existing policyholders continue to pay the higher level of charges! After all, the reductions are intended to attract new clients; not reward existing policy holders. 
So, existing policy holders continue to pay the higher level of charges!

....but lower charges might not be the only benefit

By transferring to a new personal pension it may be possible to build a structured portfolio from a wide range of funds not available with your current policy. For example, tens of thousands of people still have (and perhaps also still pay into) with profits pension policies. Most of these now pay very low annual bonuses, if any. The Pensions Office offer specialist advice on with profits pensions. Finally, we receive a significant number of instructions from clients who wish to transfer a number of different pension schemes - including benefits in a former employer's scheme - into a single policy to 'tidy up' their pension arrangements.