Contracted out pot worth £24,000 states Legal & General pensions

Legal & General pensions has estimated that the average contracted out pension pot is now worth around £24,000.

The insurer is also suggesting that Independent Financial Advisers (IFAs) consider 're-pensioning' their clients' existing pension pots to a provider with a tiered annual management charge, which reduces as funds grow.

This would provide lower fund charges and help to build a bigger pension fund for their retirement, Legal &General pensions says.

Andy Agar, Legal & General's head of retirement product development, said: "Pension providers are currently writing to IFAs contracted out pension customers regarding their decision to contract out.

"So we are suggesting that, as part of that review, it makes sense for IFAs to check the charges under their clients' contracted out plan and ongoing contributions as switching pension providers to take advantage of cheaper charges could make a big difference to their fund at retirement."