Pension holders are missing out on thousands of pounds at retirement due to losing touch with older workplace and personal pensions.
It is estimated that there could be up to £400m* invested in ‘forgotten pensions' and life assurance schemes. To help reunite people with their ‘forgotten pensions', the Department of Work and Pensions (DWP) set up the free Pension Tracing Service in 2005 and since then over 350,000 people have used the service with around 20% of those finding a lost pension. Statistics from DWP reveal that 7% of people discovered a pension that paid a lump sum in excess of £20,000.
People who are currently reviewing their pension arrangements or seeking a ‘forgotten pension' with a view to consolidating their pension arrangements by bringing their various pension pots together into one plan should consider the special terms currently available on the Alliance Trust Savings Select SIPP.
Until 29 July all pension transfers into the Alliance Trust Savings Select SIPP will have the standard £50+VAT charge waived and in addition, new customers will not incur an annual SIPP administration charge until February 2012.
As well as waiving fees, Alliance Trust Savings will continue to offer its unique commission rebate structure which returns 100% of all commission received from fund management groups directly back to a customer's SIPP account; in many instances rebating up to 50% of the fund's AMC. No other platform in the UK currently offers this facility to customers.
The difference fund rebates can make to a pension are significant. The table below illustrates the impact rebates have to the overall value of a pension fund.
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Pension Fund Value of £50,000
|
Rebate
|
10 Years
|
15 Years
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20 Years
|
25 Years
|
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Alliance Trust Savings
Select SIPP
|
0.75%
|
£89,600
|
£120,400
|
£162,100
|
£218,600
|
|
Competitor - no rebate structure
|
0%
|
£85,400
|
£111,600
|
£145,900
|
£190,700
|
|
Difference
|
n/a
|
£4,200
|
£8,800
|
£16,200
|
£27,900
|
Notes: Figures based on an annual charge of £125+VAT plus a £5 rebate reinvestment fee. Client is invested in one fund with an AMC of 1.5% and a rebate of 0.75%. Projections assume £50,000 is retained in the fund for the term shown and an annual growth rate of 7%. This contribution is compared to a product with no annual charge, no dealing charge and no rebated AMC. Figure is rounded to the nearest £100. Fund manager rebate payments we receive for funds bought and held through us may change at any time.
Jaskarn Pawar, director at Investor Profile comments on the Alliance Trust Savings Select SIPP offering:
"My client was invested in an old pension contract paying unimaginable annual fees to the provider. He knew he had to transfer it away so we researched the market for the best provider. Alliance Trust Savings offered us the best combination of low cost fees, access to a wide range of investments and easy to manage online account access.
"I have been impressed with the efficiency of Alliance Trust Savings administration. They keep me well informed at the right times, and considering the costs involved for implementation compared to other platforms it is quite impressive."
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