A DIY pension switch could save you £20k
Pension savers could gain more than £20,000 in the run-up to retirement by switching “DIY” providers, Which? has found.
Self-invested personal pensions (Sipps) allow savers to build and manage their own retirement pot of shares, funds, investment trusts and other assets, often at a lower cost than traditional pension providers.
Which? analysed the core fees charged by popular Sipps providers and found that switching could save people thousands of pounds a year in fees – potentially giving them a huge boost to their pension pot.
Annual costs for a £100,000 pot range from £150 to £450. For a pot worth £250,000, switching from the most to least expensive Sipp Which? analysed could save consumers nearly £1,000 a year.
It said a Halifax Share Dealing customer would have paid £180 after a year, compared with £1,125 with Hargreaves Lansdown.
Hargreaves Lansdown (HL) told Which?: “HL’S market leading digital wealth management service offers great value for its comprehensive offering, which includes active savings and our award-winning app, and one of the simplest, most transparent charging structures.”
The Which? research estimated that those starting with £250,000 in a Sipp at the age of 50 and retiring at 65 could end up with £22,808 more in their pension pot by choosing the most cost-effective provider over the most expensive.
Those with a £500,000 pot could be £1,570 better off per year by switching to the cheapest provider, Which? found, with Halifax Share Dealing again charging customers just £180 in fees while Hargreaves Lansdown was the most expensive in the research at £1,750.
Which? also surveyed more than 1,200 people about their Sipp providers and Fidelity topped the table with a score of 75%. The provider was named a “Which? recommended provider” alongside Vanguard (with a customer score of 72%) and AJ Bell (a score of 72%).