Aegon and Scottish Widows hike charges on “paid-up” pensions

by Gill Montia

Story link: Aegon and Scottish Widows hike charges on “paid-up” pensions

Royal London, the UK’s largest mutual life and pensions company, has been investigating pension plan charges on policies that are “paid-up”.

The research reveals that large numbers of people who have contributed to group personal pension schemes and opted not to transfer their funds to their new pension arrangements when they change jobs, are paying high annual fees.

Both Aegon and Scottish Widows have increased their charges for managing “paid-up” plans; Aegon now charges 0.75% and Scottish Widows 0.67%.

The fees are deducted from the saver’s pension fund and are higher than for pensions that are active, which in Aegon’s case is 0.4% and for Scottish Widows 0.37%.

Royal London recommends that “paid-up” policyholders should investigate the merits of transferring their pension pot or continue with a minimum contribution to the group pension plan provider, allowing the policy to remain active and attract the lower charge.

Aegon is apparently reviewing its fees for “paid-up” pension plan members who have contributed for over 10 years but the company maintains that its fees for active members are discounted and the higher fees represent a normal level of charge.