Tuesday, October 20, 2009

Switching or Changing Pension Provider

If you are thinking of switching/changing your pension provider because you are none too happy about the level of charges on your product, consider the following:

If a person saved €1,000 per month (index linked at 3%) from the age of 30 to 65, the estimated retirement fund at 65 would be €1,472,823. This assumes that there is a 5% contribution charge on each payment made, the annual management charge is 1.5% and the fund grows at 6%pa.

Using the same details for contribution,term and growth rate, but having an annual management charge of 1% and no contribution charge, the estimated fund would be €1,673,568.

That's over €200,000 in potential savings. Is that a good enough reason to change?