Pension question
Discussion
Sorry. Bit thick on pensions!
I have a pension for which I'm paying 0.87%. Having looked around, there are various places which charge a lot less. Is there a good reason for this? Are the figures quoted just headline ones to suck you in? Moneybox, for example, quote £150 per year. How can that be? Also, how can I determine growth rates with other companies? I don't know whether they are published or where to find them.
I'm currently drawing down the maximum I can without paying tax because, when I start to receive the state pension, I won't be able to drawdown any more because I'll be taxed on it.
I have a pension for which I'm paying 0.87%. Having looked around, there are various places which charge a lot less. Is there a good reason for this? Are the figures quoted just headline ones to suck you in? Moneybox, for example, quote £150 per year. How can that be? Also, how can I determine growth rates with other companies? I don't know whether they are published or where to find them.
I'm currently drawing down the maximum I can without paying tax because, when I start to receive the state pension, I won't be able to drawdown any more because I'll be taxed on it.
There are two parts to this.
Different providers will charge different fees. I'm with Vanguard who seem decent fee wise, and I have seen other people mention II as being decent fee wise. Whether you want a fixed fee or % will depend on the size of your pot.
In terms of growth rates, what are you currently invested in? If you were to move would you like to go more equities based or not? Given you are drawing from your pension I wouldn't recommend 100% equities. Vanguard have a lifestrategy product with different % of equities and bonds depending on your risk appetite so you could go 80/20 or 60/40. The fees for these are 0.2%. Other providers will have similar products
Their websites will give you the performance over the last few years, the last few years have been pretty good for most equity based funds and as always past performance is not always an indicator of future performance
Hope this helps.
Different providers will charge different fees. I'm with Vanguard who seem decent fee wise, and I have seen other people mention II as being decent fee wise. Whether you want a fixed fee or % will depend on the size of your pot.
In terms of growth rates, what are you currently invested in? If you were to move would you like to go more equities based or not? Given you are drawing from your pension I wouldn't recommend 100% equities. Vanguard have a lifestrategy product with different % of equities and bonds depending on your risk appetite so you could go 80/20 or 60/40. The fees for these are 0.2%. Other providers will have similar products
Their websites will give you the performance over the last few years, the last few years have been pretty good for most equity based funds and as always past performance is not always an indicator of future performance
Hope this helps.
Josemartinez said:
There are two parts to this.
Given you are drawing from your pension I wouldn't recommend 100% equities.
Going a bit off topic..Given you are drawing from your pension I wouldn't recommend 100% equities.
Depending on age I still would, if 60 you could have 30 years plus of investing ahead.
It's all down to risk appetite.
Back on topic, look at InvestEngine, zero fees on SIPPs.
Why give a portion of your pension away, when you can avoid it?
Edited by superpp on Wednesday 19th August 15:48
superpp said:
Going a bit of topic..
Depending on age I still would, if 60 you could have 30 years plus of investing ahead.
It's all down to risk appetite.
Back on topic, look at InvestEngine, zero fees on SIPPs.
Why give a portion of your pension away, when you can avoid it?
That's a good point, I'm 100% in equities but I'm only 34 so plenty of time to recover. Depending on age I still would, if 60 you could have 30 years plus of investing ahead.
It's all down to risk appetite.
Back on topic, look at InvestEngine, zero fees on SIPPs.
Why give a portion of your pension away, when you can avoid it?
Exactly, you've worked hard for it so why give it away in fees or tax if you can help it.
maccboy said:
Sorry. Bit thick on pensions!
I have a pension for which I'm paying 0.87%. Having looked around, there are various places which charge a lot less. Is there a good reason for this? Are the figures quoted just headline ones to suck you in? Moneybox, for example, quote £150 per year. How can that be? Also, how can I determine growth rates with other companies? I don't know whether they are published or where to find them.
I'm currently drawing down the maximum I can without paying tax because, when I start to receive the state pension, I won't be able to drawdown any more because I'll be taxed on it.
I'd suggest break down exactly what you're paying between platform fees, fund fees, and possible SIPP specific fees.I have a pension for which I'm paying 0.87%. Having looked around, there are various places which charge a lot less. Is there a good reason for this? Are the figures quoted just headline ones to suck you in? Moneybox, for example, quote £150 per year. How can that be? Also, how can I determine growth rates with other companies? I don't know whether they are published or where to find them.
I'm currently drawing down the maximum I can without paying tax because, when I start to receive the state pension, I won't be able to drawdown any more because I'll be taxed on it.
I wouldn't really say "good reasons" just "there's lots of choice and some cost more than others sometimes for different things sometimes for the same thing" reasons.
Cats_pyjamas said:
A SIPP is just a 'wrapper'. You don't have to buy individual shares (although you can). You can buy into funds. Just be aware sometimes the provider has a fee and there is also a fund fee.
You see, that's where it gets awkward, because they just quote the headline figure. A bit like quoting flight prices, without any of the extras you need. Sounds expensive.
On a £500k pot that’s over £4k in fees.
You could for example have a Vanguard S&P 500 ETF and pay 0.07% fund fee, which is built in you never actually see that money going out. If you held on Fidelity it would cost you £90 a year on their platform fee which would go out at £7.50 a month.
The reason I mention these is that they are both well established respected providers.
It’s well worth looking into as there is so much good free information available.
On a £500k pot that’s over £4k in fees.
You could for example have a Vanguard S&P 500 ETF and pay 0.07% fund fee, which is built in you never actually see that money going out. If you held on Fidelity it would cost you £90 a year on their platform fee which would go out at £7.50 a month.
The reason I mention these is that they are both well established respected providers.
It’s well worth looking into as there is so much good free information available.
maccboy said:
Thanks for all the advice.
I'm paying a 'flat fee' of 0.87%. I'm retired (but not drawing state pension) and I don't know enough about shares etc to do my own SIPP. I'll check out the options mentioned above.
Well what are you doing now?I'm paying a 'flat fee' of 0.87%. I'm retired (but not drawing state pension) and I don't know enough about shares etc to do my own SIPP. I'll check out the options mentioned above.
You’ll have a statement or something that will show what you’re paying and what you’re invested in.
trickywoo said:
Sounds expensive.
On a £500k pot that s over £4k in fees.
You could for example have a Vanguard S&P 500 ETF and pay 0.07% fund fee, which is built in you never actually see that money going out. If you held on Fidelity it would cost you £90 a year on their platform fee which would go out at £7.50 a month.
The reason I mention these is that they are both well established respected providers.
It s well worth looking into as there is so much good free information available.
Wow! That's quite a difference. Can I transfer my pension to them directly? I'd have to check for costs to leave where it currently is though. The Vanguard fund fee of 0.07% won't include all the other bits, like management fee and whatever else. On a £500k pot that s over £4k in fees.
You could for example have a Vanguard S&P 500 ETF and pay 0.07% fund fee, which is built in you never actually see that money going out. If you held on Fidelity it would cost you £90 a year on their platform fee which would go out at £7.50 a month.
The reason I mention these is that they are both well established respected providers.
It s well worth looking into as there is so much good free information available.
maccboy said:
trickywoo said:
Sounds expensive.
On a £500k pot that s over £4k in fees.
You could for example have a Vanguard S&P 500 ETF and pay 0.07% fund fee, which is built in you never actually see that money going out. If you held on Fidelity it would cost you £90 a year on their platform fee which would go out at £7.50 a month.
The reason I mention these is that they are both well established respected providers.
It s well worth looking into as there is so much good free information available.
Wow! That's quite a difference. Can I transfer my pension to them directly? I'd have to check for costs to leave where it currently is though. The Vanguard fund fee of 0.07% won't include all the other bits, like management fee and whatever else. On a £500k pot that s over £4k in fees.
You could for example have a Vanguard S&P 500 ETF and pay 0.07% fund fee, which is built in you never actually see that money going out. If you held on Fidelity it would cost you £90 a year on their platform fee which would go out at £7.50 a month.
The reason I mention these is that they are both well established respected providers.
It s well worth looking into as there is so much good free information available.
The 0.07% plus the platform fee is all you would pay. Plus £7.50 each time you buy or sell.
There are plenty of ETF (exchange traded funds) depending on how you want to structure your investments. Going 100% in a S&P 500 while in drawdown isn’t for everyone!
maccboy said:
Wow! That's quite a difference. Can I transfer my pension to them directly? I'd have to check for costs to leave where it currently is though. The Vanguard fund fee of 0.07% won't include all the other bits, like management fee and whatever else.
Check what you're invested in and what you should be invested in.These threads always go the "global tracker" route when nobody knows a thing about you as to how suitable that might be.
No rush and this is life impacting. It's worth putting the homework in.
OP, you should make sure that you're comparing like with like when assessing which platform offers the best value to you.
Some charge a percentage platform fee, while others charge a fixed monthly fee. Therefore in terms of £ cost, the current and likely future values of your pension pot will affect the former over time, but not necessarily the latter.
The ongoing charges for the funds that you're invested in shouldn't differ by platform (although some platforms might've negotiated slightly better rates from certain fund managers). This will be a percentage.
Not sure if you're still paying in, but dealing fees are another thing to consider.
You do mention that you're in drawdown, some platforms may impose charges for this.
It sounds like you have a managed SIPP (not sure if the naming rules allow you to say exactly what product you have)? If you really wanted to minimise costs, then the DIY SIPP route would save a few quid - but how comfortable would you be doing this?
Some charge a percentage platform fee, while others charge a fixed monthly fee. Therefore in terms of £ cost, the current and likely future values of your pension pot will affect the former over time, but not necessarily the latter.
The ongoing charges for the funds that you're invested in shouldn't differ by platform (although some platforms might've negotiated slightly better rates from certain fund managers). This will be a percentage.
Not sure if you're still paying in, but dealing fees are another thing to consider.
You do mention that you're in drawdown, some platforms may impose charges for this.
It sounds like you have a managed SIPP (not sure if the naming rules allow you to say exactly what product you have)? If you really wanted to minimise costs, then the DIY SIPP route would save a few quid - but how comfortable would you be doing this?
maccboy said:
Moneybox, for example, quote £150 per year. How can that be?
Unfortunately that's not the full picture.Moneybox's platform fee is 0.15% (capped at £150 per annum), but then you've got the fund fees on top.
If you go with one of Moneybox's three managed funds, then you'd pay an additional 0.29% per annum.
A limited selection of non-Moneybox funds are available on the platform (which start at 0.12% per annum), but if you choose those then the Moneybox platform fee becomes 0.45% with no annual cap.
https://www.moneyboxapp.com/pension-funds-fees
C69 said:
It sounds like you have a managed SIPP (not sure if the naming rules allow you to say exactly what product you have)? If you really wanted to minimise costs, then the DIY SIPP route would save a few quid - but how comfortable would you be doing this?
Not at all comfortable! I'd be happy with a managed one though. I'm not paying into the pension, just drawing down until I get to state pension age.The funds I have are mainly equities from the US and UK, with some others thrown in.
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