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  • FIRST POST
    • jim8888
    • By jim8888 4th Oct 17, 1:59 PM
    • 39Posts
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    jim8888
    Minimising Charges
    • #1
    • 4th Oct 17, 1:59 PM
    Minimising Charges 4th Oct 17 at 1:59 PM
    I have a Pension with Standard Life that I no longer pay in to. It's currently valued at c. 477k, but I noticed on my statement that I was charged slightly over 4k last year on this amount.
    When I looked at a Vanguard Life Strategy 60/40 fund, the charges seemed to me to be 0.22%, considerably less than SL.
    So I wondered, can I transfer my pension out of SL and over to a Vanguard Life Strategy fund ? Is this a relatively simple process?
Page 1
    • ams25
    • By ams25 4th Oct 17, 2:18 PM
    • 100 Posts
    • 85 Thanks
    ams25
    • #2
    • 4th Oct 17, 2:18 PM
    • #2
    • 4th Oct 17, 2:18 PM
    It may be worse than that.. is the £4k fund charges or the SL management charges? you could be paying another 1% or so for fund charges (the equivalent of the 0.22%).

    I had a L&G pension where i was paying about 1% on top of the fund charges.

    I transferred this from L&G to my SIPP - this is not difficult to do, but you may need to open a SIPP first and the provider will manage the transfer for you. Depending on who you move to, you will pay a platform fee plus the 0.22% vangard fund charge. Probably less than 0.75% in total and potentially less. so if your are paying the £4k and fund charges of c.1% you could reduce charges by c.£5k pa.

    of course the VLS fund may not provide the best return, but that's a different topic!
    • Linton
    • By Linton 4th Oct 17, 2:19 PM
    • 8,621 Posts
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    Linton
    • #3
    • 4th Oct 17, 2:19 PM
    • #3
    • 4th Oct 17, 2:19 PM
    I assume that SL only supports SL funds or funds rebadged as SL funds. You should be able to transfer out of SL to a platform where you could hold a VLS fund. Almost any online SIPP would do the job. Vanguard themselves dont yet deal with pensions. The process of transferring is much the same as transferring an ISA. You find somewhere to transfer into and they make it happen, though the process can take rather longer.

    Having transferred you will be liable to 2 sets of charges, one for the fund manager and one for the platform whereas I think the SL charge is bundle . However the total should be rather less than the SL charge of around 0.84%. You will need to research the best platform for your purposes.
    • dunstonh
    • By dunstonh 4th Oct 17, 3:12 PM
    • 89,873 Posts
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    dunstonh
    • #4
    • 4th Oct 17, 3:12 PM
    • #4
    • 4th Oct 17, 3:12 PM
    When I looked at a Vanguard Life Strategy 60/40 fund, the charges seemed to me to be 0.22%, considerably less than SL.
    You are not comapring like for like. The VLS fund requires a platform. So, you would need to add a platform charge on top of that.

    So I wondered, can I transfer my pension out of SL and over to a Vanguard Life Strategy fund ?
    You can transfer out but not directly to Vanguard.

    Are you also comparing like for like. For example I have some SL pensions on my books with charges as low as 0.3% all in. However, those contracts also offer more expensive funds should the person want them.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • jim8888
    • By jim8888 4th Oct 17, 3:12 PM
    • 39 Posts
    • 35 Thanks
    jim8888
    • #5
    • 4th Oct 17, 3:12 PM
    • #5
    • 4th Oct 17, 3:12 PM
    Isn't it outrageous that there could be a further 1% charge being levied "behind the scenes"? I will need to look into that, but why isn't it totally upfront? Why aren't they (financial companies) forced to disclose ALL charges in a year? A simple Excel spreadsheet could no doubt calculate it.
    • Chickereeeee
    • By Chickereeeee 4th Oct 17, 4:24 PM
    • 423 Posts
    • 262 Thanks
    Chickereeeee
    • #6
    • 4th Oct 17, 4:24 PM
    • #6
    • 4th Oct 17, 4:24 PM
    Isn't it outrageous that there could be a further 1% charge being levied "behind the scenes"? I will need to look into that, but why isn't it totally upfront? Why aren't they (financial companies) forced to disclose ALL charges in a year? A simple Excel spreadsheet could no doubt calculate it.
    Originally posted by jim8888
    I don't think that is true. I believe, as it is a Standard Life fund, all charges ('fund' and 'platform') are included in that £4k (which is about 1%)

    C
    • dunstonh
    • By dunstonh 4th Oct 17, 4:25 PM
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    dunstonh
    • #7
    • 4th Oct 17, 4:25 PM
    • #7
    • 4th Oct 17, 4:25 PM
    Isn't it outrageous that there could be a further 1% charge being levied "behind the scenes"?
    There are certain charges that may be incurred that are not regular or consistent in amount. However, the OCF for UT/OEICs (or AMC in case of pension funds) covers the bulk of the charges. It shouldnt be a further 1%. Normally its 0.0x%. Not sure where you are getting this 1% from.

    The standard life personal pension is not an investment platform. It is a product. You need to compare like for like. VLS is a UT/OEIC fund. Standard Life is a personal pension.

    Why aren't they (financial companies) forced to disclose ALL charges in a year?
    They will be doing this from next year either as an estimate in advance or an actual figure in arrears.

    A simple Excel spreadsheet could no doubt calculate it.
    No it wouldnt.
    Last edited by dunstonh; 04-10-2017 at 4:27 PM.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • cloud_dog
    • By cloud_dog 4th Oct 17, 7:24 PM
    • 3,304 Posts
    • 1,864 Thanks
    cloud_dog
    • #8
    • 4th Oct 17, 7:24 PM
    • #8
    • 4th Oct 17, 7:24 PM
    Or consider a fixed price platform. You would incur dealing charges but the annual platform charge would range from about £120 to £200 a year (plus the fund charge).

    It depends on what you want to hold type and frequency of transactions etc etc.

    Search for SnowMan's coolly comparing platform charges spreadsheet.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
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