Is my pension provider just taking their fees for no performance?

02 August 2023

Question by Kevin

I have a pension with ReAssure - was Legal and General. My pension is 130k and has stood still for about 2 years. It always goes up a bit just before they take their yearly charge of £1000! Then dips for 10 months. In the last 2 years, I’ve made £0. Are they just taking their fees for no performance?


Answered by Matthew Spence

Hi Kevin,

To address this question, an understanding of your pension, investment objectives, risk profile, and capacity for loss would likely be necessary. Different types of pensions are available, and the underlying investments will vary depending on the specific pension and its objectives.

For instance, an individual with a defined contribution pension and a cautious attitude toward risk is likely to have a higher allocation to bonds (fixed interest), which historically and structurally are considered less risky than equities.

Recently, the inverse relationship of bond prices with interest rates has, in general, negatively impacted portfolios with more cautious mandates, resulting in flat returns over the last couple of years. On the other hand, individuals with a higher weighting towards global equities in their portfolios have probably experienced better performance.

Understanding the composition of your portfolio will likely assist you in determining if it meets your requirements and performs in the way it should. It is worth bearing in mind that similar to many disciplines, investing may appear straightforward at a surface level, but delve deeper and it can become complex.

Regarding charges, it is typical for fees to be based on a percentage of the fund's value. If you have concerns about charges, you could contact Reassure and request a breakdown of the charging structure.

I hope this helps to some extent, and if you wish to discuss, please feel free to contact me.

Matt

Answered by

Matthew Spence

Director

I am an experienced financial adviser committed to helping individuals and families achieve their financial goals. With over 19 years of experience in the financial industry, I have had the privilege of assisting numerous clients in making informed decisions and securing their financial future.