Is Aegon Pension Any Good?

Aegon, with 190 years of history, is known as one of the oldest financial institutions in the UK. In the beginning, it was named Scottish Equitable. Later, it changed to Aegon and established itself as a reliable brand for pension and protection plans. 

Presently, they are trusted by over 4 million UK clients using their range of retirement and workplace pension schemes. 

Let us review the pension plans Aegon offers.

Aegon Default Pension Funds

old-age-g241e35675_1280.jpg

Default Pension Fund is one of the very popular schemes among UK people who wish to invest through their employee pension schemes.

 

It is designed with a suitable investment strategy for people who are unable or do not want to make their own pension decisions. 

Here are the pros and cons of Aegon Default Pension Fund:

Pros

  • Suitable for a broad range of pension scheme members.

  • Designed with low-cost investments to perform in line with the market Aegon tracks.

  • Helps employees’ savings grow in the early years.

  • Moves into lower-risk investments as employees reach near to their retirement age.

  • Default fund remains appropriate for the employer’s scheme.

 

Cons

  • The fund doesn’t guarantee to meet its objectives. 

  • The value of an investment may fall or rise and is not fixed.

  • The final value of the pension pot of a scheme member by the time they wish to take benefits could be less compared to what they paid in.

Aegon Workplace Pension

 

Aegon workplace pension is a way to save for retirement, set up by the employer. In this plan, both the employer and the employee pay into the employee’s workplace pension.

Let us see, what are the benefits of this pension.

 

Pros

  • Employees get benefitted from their employer’s contributions.

  • Employees usually get tax relief on their pension contributions from the government to encourage pension savings.

Cons

  • There are limits applicable to pension contributions each tax year. The maximum amount of pension savings an employee can have to get the benefit of tax relief is currently £40,000. 

  • Some workplace pensions are run using ‘salary sacrifice’, which is not suggested to everyone, especially if one’s post-sacrifice salary will be less than the National Minimum Wage. 

Aegon Retiready Pension

Retiready pension by Aegon is to enable the members to track their savings and retirement goals, offering complete control over their investment. 

Keeping all the retirement plans in one place makes it easier to manage them while providing a clearer picture of their retirement.

Here are some pros and cons of the Aegon Retiready Pension scheme:

 

Pros

  • Complete control over all the pensions.

  • Simple investment options.

  • Transparent charges.

  • Relief on tax on the contributions.

  • Up to 25% tax-free cash option after retirement.

  • Option to combine different pension pots.

 

Cons

  • The value of an investment is not guaranteed as it can fall and rise.

  • The pension is accessible only if you turn 55. 

  • The member can take 25% of their Retired pension pot as a tax-free cash sum after their retirement. However, any balance will be taxed as income, which might put the member in a higher tax slab. It is true especially in case it is taken all in one tax year.

  • The value of any tax relief is based on individual circumstances.

  • Transferring a pension may lead to the loss of features, protections, guarantees or other benefits.

 

Aegon LifePath Pensions

 

The range of funds of Aegon LifePath pension is an investment solution that automatically and gradually moves the member’s savings as they approach their retirement age. It minimises the risk and aligns the fund in a way so that the member draws their benefits at retirement as intended.

The Lifepath funds are available in three forms - the Lifepath Flexi, Lifepath Capital and Lifepath Retirement range.

 

Pros

  • LifePath shows equities (company shares) to provide returns in excess of inflation when the member is 35 years away from their target retirement age. 

  • It aims to spread (or ‘diversify’) the risk.

  • It invests in equities from a variety of regions and countries.

  • It invests in assets such as commercial property and commodities.

 

Cons

  • Diversification helps control investment risk but doesn’t remove it. 

  • There’s a higher risk that the investments may fall in value.

 

Aegon Select Portfolios

The Select Portfolios by Aegon provides access to the entire portfolio of investments in a single fund. You are given the choice of six funds, ranging from Cautious to Adventurous. Each one of them is framed to match an individual risk preference. Hence, you can choose a risk level that you are comfortable with. 

 

Pros

  • Allows you to pick the balance of risk and long-term growth potential as per your requirements.

  • The experts at Aegon manage on your behalf. They monitor your portfolios and modify them if needed, 

  • It contains a combination of funds that are considered to be the best in different sectors.

  • The investment performance is closely monitored by Aegon’s Fund Governance Group.

 

Cons

  • It doesn’t guarantee that the funds will meet their objectives. 

  • The investment value can go down or up and therefore is not guaranteed. 

  • You may get back less than what you invested.

 

Aegon Core Portfolios

 

Aegon Core Portfolios comprise seven portfolios, each providing a comprehensive investment solution in a single fund. The portfolios use passive components that meet clients’ needs and help grow long-term savings. 

These are offered to employees with an Aegon Retirement Choices or One Retirement pension.

 

Pros

  • There is a broad range of options to match individual needs while keeping risk within a defined range.

  • Aegon experts work closely with Morningstar1, award-winning investment specialists to develop the optimal strategic asset mix for each fund in the range.

  • It aims to take advantage of market gains while keeping costs low.

  • It eliminates unnecessary transaction costs, using passive components and avoiding investment in more expensive alternative assets

 

Cons

  • It doesn’t guarantee that the funds will meet their objectives. 

  • The investment value can go down or up and therefore is not guaranteed. 

  • You may get back less than what you invested.

 

Aegon Pension Reviews: FAQs

Should I invest my money in pensions? 

Pension is a way to ensure that you enjoy the desired lifestyle after retirement. If you have planned your retirement at an early age, investing in a pension can benefit you greatly. 

Considering all types of pension investments, the rate at which the pension fund grows is likely to fluctuate over time. Hence, there will be a risk of not receiving the amount as expected. Yet, the changes in the value of the funds, say 15% drop in growth could still represent a fund that is gaining value.

Overall, it is a smart step to plan your pension scheme at an early stage of your employment.

Is Aegon a good pension provider?

Aegon is the oldest financial institution in the UK operating that has established itself as the most reliable pension scheme provider. The majority of UK citizens have opted for their pension schemes, as it promises and has successfully shown good returns over a period. 

 

How long has Aegon been in the business?

Aegon has a history of being in the financial institution industry for over 190 years. For several years, it has been the only pension scheme provider in the UK.   

Is there a minimum contribution I can pay to my pension? 

Here are the minimum contributions that employee can make:

Aegon Retirement Choices SIPP

One Retirement

Regular contribution

£1 per month

£1 per month

Single contribution

£1

£1

Transfer payment

£250

£250

Can I withdraw money from the Aegon pension?

Yes, you can withdraw money from Aegon pension at 55 years of age.

How much can I withdraw from the pension at 55?

You can withdraw all of your pension funds, once you become 55 years old. You can take up to 25% as a lump sum without paying tax. For any subsequent withdrawals, you will be charged at your usual rate. You can invest all of the money in an annuity, which will pay out a guaranteed income for the rest of your life.

What's the interest rate payable on the ARC and One Retirement cash facility?

Should you choose a financial adviser?

Pension advice from an independent expert can make all the difference. An expert adviser can assist you to spot your actual financial priorities and then suggest a plan that would help you achieve them. The financial advisers have access to the latest product research and therefore they are able to explain to you all the benefits, possible risks, charges, and tax implications of different investment options.

 

This way you can weigh up all of the available choices and make an informed decision, based on your retirement needs and personal circumstances.

You should definitely consider a financial adviser to ensure that you choose the best plan that suits you the most.

Summary

Aegon has a range of pension schemes and funds with each having advantages and disadvantages. Also, every scheme is designed keeping individual requirements. Hence, if you are planning to opt for any of those, make sure you seek specialist advice first to choose the best one for your happy retirement.