Pension question: IFA fees?

[Bossk128]

TLDR: Do I need an IFA to manage my pension with an 'off the shelf' pension scheme, or can I do it myself and avoid his fees?

Quick question for those who have an independent personal pension:

my employer has recently started doing a pension with a matched 1% (woo hoo!). It's a small company, so it's not their own scheme but something selected by the company's independant financial advisor from another provider (Scottish Life). However the fees are quite expensive as far as I can tell.

1: First year 20% of your total payments to the independent financial advisor
2: Ongoing £3.50 per month to the IFA
3: If your pension deposits go up (i.e. you get a payrise, or you choose to increase your %) the IFA gets 20% of the increase
4: there is an ongoing charge from the pension company (in this case 0.9%).


All my previous pensions have been with the bigger company schemes, so these charges were pretty much hidden from me (and the larger matched % offset any fees).

Having looked at the Scottish Life scheme on MSE etc I can see the 0.9% fee and understand that is what they charge, but is there anything stopping me from taking a policy out with them directly? Do I need to do much? Can I do that and avoid all the IFA fees?

I understand how pensions work, but I have no interest in learning the intricacies of which funds to use.

Cheers for your advice!

 

[Bossk128]

Thanks for the help guys. It is a GPPP, and I do know that if I want the 1% I need to stay in that pension scheme. What I'm trying to figure out is if it's worth putting how much I want to save into this pension scheme, or run two in parallel, this at 1% and another at a higher rate. If the prices were fixed tiered or capped maybe I'd go for it all in here, but as it scales I'm concerned I'd be paying too much.

I guess I'm questioning the value for money of the IFA: if it is a GPPP is there anything the IFA does, and is it managed by Scottich Life, or do you think my the IFA has an active hand in managing the pension pot?

I've been without a pension for 2 years so feel I need to catch up a bit, I don't want to be adding top up money for it to be siphoned off all the time.


The comment about going it alone is interesting, but I don't know why he would charge me less if I went directly? If he sets his own fees (rather than my company setting his fees) why would he want to lower the fees?

 

[Bossk128]

100% correct.

Oh and OP, you have to be given the option to pay the fee upfront from your own pocket, instead of from the premiums.

Wow lots of top posts whilst I've been away. Time to read properly required!

As far as paying up front goes, does that incur a saving? I guess it's the same as paying mortgage fees out of your pocket. What happens if I pay the fee up front but increase % within the year?

 

[Bossk128]

OK to summarise some of the posts above:

The Scottish Life scheme is a good GPPP to go woth, and the compnay has a good track record of investing funds.

The fees stated aren't too far off what I'd expect elsewhere.

Taking out the same plan directly (through e.g. Cavendish) might save money but puts more onus on me for due diligence

Our IFA has already discussed a little about how to spread the cash into high/low risk funds, I think his pension advice is free whilst in the scheme.


So overall I think I'll just use this scheme and put a decent % in , and have only this pension. If I ever want to add more funds to the pot (lump sum) I'll make sure to try and coincide it with any pay rises to minimise his 20% commission period over the following year.

Thanks all for your contributions, very helpful.