Does the Stakeholder pension annual charge include fund charges

spiderplant0
spiderplant0 Posts: 9 Forumite
in Pensions, annuities & retirement planning
Hi, I am self employed and need to get a pension. I am trying to compare SIPP and stakeholder schemes.
I intend to put about £10K in per annum.

From my reading, for SIPP pensions, the main charge seem to be =
the supermarket annual percentage fee of the total pension pot or an annual flat fee
plus the individual fund manager charge (typ 0.75%) of fund size

I was wondering does the Stakeholder annual fee (capped at 1.5% by the government) include the individual fund manager charge?

I was asking because this stakeholder one:
Stakeholder Pension - Savings & Retirement - Aviva
Seems to charge just 0.55%.

The lowest I have found for SIPP is from BestInvest of 0.3%, giving a typical annual fee of 0.3 + 0.75 = 1.05%

Comments

  • dunstonh
    dunstonh Posts: 116,316 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Hi, I am self employed and need to get a pension. I am trying to compare SIPP and stakeholder schemes.

    Dont forget the mainstream option of a personal pension. SIPPs and stakeholders are niche options either side of the personal pension.
    From my reading, for SIPP pensions, the main charge seem to be =
    the supermarket annual percentage fee of the total pension pot or an annual flat fee
    plus the individual fund manager charge (typ 0.75%) of fund size

    SIPPs tend to have a large menu of charges for various admin events. Most you may never use or just use once. However, you need to be aware of them.
    You will have the sipp provider charge and the investment charge.
    I was wondering does the Stakeholder annual fee (capped at 1.5% by the government) include the individual fund manager charge?

    Rule RU64 still exists but its really obsolete. That figure is higher than than modern plans which is why it doesnt really mean anything now. For example, for over £20k, you can get 0.45% easily as a bottom line with a personal pension.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • EdSwippet
    EdSwippet Posts: 1,588 Forumite
    First Anniversary Name Dropper First Post
    Worth noting that the 'typical' 0.75% fund manager charge is not necessarily what you would pay. It might be more, or very possibly quite a bit less.

    You can build a well diversified portfolio using only Vanguard or HSBC tracker funds. These have fund charges in the range 0.08% to perhaps around 0.25% at the upper end. Your blended fund manager charge might come to 0.15% say. So 0.45% with BestInvest's 0.3% platform fee, and quite competitive relative to a stakeholder or personal pension.

    If you go the SIPP route, once you get over around £70k of pension savings a flat-fee SIPP platform, such as Alliance Trust Savings or Interactive Investor, beats a 0.3% platform fee.
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