Moving existing pension plans to Cavendish Online to reduce the charges

Cavendish Online is the only "nil commission" discount broker in the UK - we give back all of the commission wherever possible.

This means that you can benefit by changing or moving existing pension plans from your current adviser (or direct with the insurance company) to Cavendish Online. The process of moving to us involves setting up a new plan via Cavendish Online and simultaneously transferring your existing plan into the new one. This way your whole pension fund will be under Cavendish Online’s reduced charges with a new policy number. This process is called Repensioning and is available with most companies, except Standard Life*. The benefit is that the annual management charge will reduce by up to 0.4% for the whole term of the plan.

An example of this is shown in Martin Lewis's article for Moneywise Magazine. In summary he used a Stakeholder Pension contribution of £200 per month for 25 years, which, under "normal" (full) commission - assuming 7% per annum growth - would achieve a fund of £181,000. If the customer had used Cavendish Online from the start, the plan would eventually be worth £190,000. But if an individual decided to transfer this plan to us after three years, under our nil commission terms, the value after 25 years (22 under Cavendish Online) would be £188,200. Still a significant saving.

Some clients ask if they can just make the new contributions to their current pension plan via Cavendish Online and this is an option. In this case, only that new contribution will be on the reduced annual management charge (AMC) and your existing pot will be unaffected (presumably remaining on the normal, higher AMC).

To proceed with Repensioning, you must complete the following forms and send them to Cavendish Online:

1. A new pension application form, showing your “new” regular contributions (if applicable). Forms for most companies are available on our website.
2. A transfer form to transfer your existing plan into the new one. Forms for most companies are available on our website.
3. The discharge forms for the above plan. You can request these from the current pension provider.
Please note: Some companies may have trouble understanding that you are moving from, for example, Norwich Union to Norwich Union. This is because Cavendish Online is the only company to use the Repensioning process.
4. Our Change Of Agency (PDF) form (or HTML), along with our Client Declaration and fee of £35.00 for each plan.
We will then forward these to the company concerned and arrange for the new scheme to be set up on nil commission terms. This will involve you receiving a new policy number and policy documents.

For tax reasons we cannot give back commission on pensions as cash, in the way that we can for ISAs and PEPs, for example. If the commission cannot be reinvested, then we cannot help you. It may be worth setting up a new plan altogether, as the charges on newer schemes are much lower than five or ten years ago.

*Axa, Standard Life and Clerical Medical do not allow direct Repensioning and Scottish Equitable limit the option to their stakeholder pension. You can circumvent this restriction by transferring to another provider and then transferring back to Standard Life/Clerical Medical. It is more laborious for you and involves an additional fee to Cavendish Online, because there are two transfers (from and then back to your current provider). As there are no longer initial charges or bid-to-offer spreads on Pensions, there should, however, be no other cost involved in this process, and will still save you money in the long term.