What can I do about the high fees I’m paying on an old pension I have?

30 May 2018


I have just discovered that I am paying £15 a month in fees on a pension I no longer pay into. It was closed in 2015. How can I avoid these high fees? I’m not planning to retire for another 13 years and I don’t want to have to pay this amount for all that time, especially when I don’t know what these ‘admin costs’ are.



You are not alone. Many people are paying high charges on their personal pensions. These are typically policies which were taken out many years ago.

The good news is that pension charges have fallen significantly in recent years, including the government introducing a 0.75% charge cap on default pension funds as part of the auto-enrolment initiative.

While this is good news, it doesn’t help those with older pension policies, where charges are usually higher and often very difficult to understand. Many people will be paying far more in charges than they realise.

“The good news is pension charges now have a 0.75% cap”

The simple solution is to transfer your money to a more competitive pension which has lower charges. Transferring from one personal pension to another should be quite straightforward.

However, you will need to be aware of any potential pitfalls to doing this. It could be that you are giving up some valuable guarantees, such as high guaranteed annuity rates (GARs), if you move elsewhere, and you should also look out for any exit penalties. Many older-style pensions will penalise you if you transfer away from them.

So while transferring to a different pension seems like the logical choice, make sure you understand any downsides before you do it. If you’re not sure, you should take independent financial advice.

Patrick Connolly is a certified financial planner at Chase de VereFind out who our experts are on the Ask the Experts homepage.