I want to move my pension pots into an ethical fund, how do I decide?

12 February 2021

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Question by Michael

I'm reviewing my pensions to place into an ethical fund.

I've narrowed my choices down to either: Aviva or; LionsTrust using the Old Mutual platform.

I'm receiving financial advice but can't make up my mind!

My Aviva charges would only be 0.4%, but the platform (Old Mutual Wealth) and fund charges would be 1.13% altogether. Although I've been paying into pensions for the last 30+ years things have moved on since I last reviewed things.

Platforms and investor choice are all new to me.

Do you have any tips on how to decide if moving to a platform like Old Mutual is worth the extra cost?

Many thanks,

Michael.


Answered by Helena Wardle

Hi Michael.

It's an excellent question and worth exploring. I would start by thinking about what actions you need from the pension in future, i.e. how do you want to withdraw money when you need it, how do you want to track the money, do you feel happy with the level of investment options, what is their service standards, how do they communicate to you etc.

I would then use the features you ideally need from the pension as a checklist to compare the two providers' features. My Aviva and Old Mutual would have a Key Features document that should help you with the information you need. Ultimately the pension providers (My Aviva and Old Mutual) would assist you with administering your pension.

If you can get the features that you need at a lower cost, then you would save £73 per £10,000 a year by using My Aviva. However, if the more expensive provider offers features that you would not get from the My Aviva contract, you can then weigh up if you think it provides you sufficient value to justify the higher cost.

Over time charges have a significant impact on money and investor returns. I will always factor in the charges to check if you are getting anything more worth paying for when you decide which provider to use.

I hope this helps.

Keep well.

Answered by

Helena Wardle

Chartered Financial Planner

I am passionate about helping people get more clarity, confidence and reassurance with their money matters. I feel it is important to understand our client’s stories and to help connect their money with what matters to them.