Consolidating company pensions into a self-invested personal pension (SIPP) could resolve problems people have managing pensions and with charges, providers have claimed.
Research carried out for Fidelity Investment Managers showed that 20 per cent of people in the UK have two or more company pensions, with more than eight per cent having four investments with different schemes.
Rob Fisher, head of UK personal investments at Fidelity, said: “These days, over the course of the average working life, people are highly likely to work for several different employers, each providing different benefits and pension arrangements.
“Investors should be aware that if they have pension savings from previous employment they may well now be able to move these making it easier to manage their pension portfolios.”
The survey of 2000 people showed that 35 per cent of people acknowledged they had lost control of their previous occupational pensions, and 75 per cent said they would welcome the chance to consolidate their pensions into one place.
Fidelity provides a SIPP and is now opening its Direct SIPP to previous employment, money purchase occupational pension transfers.
Another SIPP provider said on the 13 October that the investors were able to benefit from the increased choice on the type of investment available within a SIPP as well as paying lower charges than with a stakeholder pension plan.
Alliance Trust Savings said the charges for stakeholder pensions – a type of personal pension scheme with set minimum standards – changed in 2005 allowing the annual management charge to be up to 1.5 per cent for the first ten years of a scheme and 1 per cent thereafter.
Head of pensions at Alliance Trust Savings, Steve Latto, said: “There is a common myth that SIPPs automatically mean higher charges compared to their personal pension or stakeholder pension counterparts.”
Alliance say their Select SIPP offers access to a range of funds with an annual management charge of 1 per cent or less.
SIPPs are a type of personal pension plan with similar systems for contributions, tax relief and eligibility as other schemes but allow a greater flexibility over how pensions funds are invested.
© Fair Investment Company Ltd