"and now for something completely different!"

Deemy

dunstonh wrote:

Keep seeing reference to hefty charges with Skanida. Best have some examples to clarify. 30 year old putting £10k gross into a pension. Assume full commision terms (so no commission discounting to effect providers) and default investment fund. Commencement age 65. These would be the fund values at 7% pa. growth:

1 - Skandia Life Personal Pension £80,200
2 - Friends Provident Individual Personal Pension £77,900
3 - Friends Provident Individual Stakeholder Pension £77,900
4 - Norwich Union Your Pension Select (PP) £76,000
5 - Clerical Medical Future Proof Individual Personal Pension £75,600
6 - Clerical Medical Future Proof Individual Stakeholder Pension £75,600
7 - Norwich Union Your Pension (Stakeholder) £75,300
8 - Scottish Widows Stakeholder Pension £73,000

There were others below this but you get the point. It should also be noted that there were some no responders as their systems go offline at weekends.

So, Skandia in this case had the lowest charges.

Doing the same with bonds (but using 100k over 10 years), Skandia were 17 out of 24 responding. So they don't do as well there. Although I bet if you were to add in the tied advice channels, they would mostly appear below Skandia so there has to be some perspective.

So, we do have to be careful when slagging off a company due to charges. There are times that their products will be cheap and other times they will be expensive.

Since, were now talking pensions - whats the comparison against a Sipp with NO annual charges

dunstonh

Deemy wrote:

Since, were now talking pensions - whats the comparison against a Sipp with NO annual charges

A stakeholder pension and most personal pensions would be exactly the same on an annual basis. However, long term the personal pension and stakeholders would be cheaper than the SIPP due to there being no admin charges for various events which would be present on the SIPP.


For further comparisons, I am half way through researching 50k to go into a unit trust/OEIC porfolio using the same funds with each of the fund supermarkets, Skandia have the lowest charges so far. That includes beating Fidelity FNW.

EdInvestor

However, long term the personal pension and stakeholders would be cheaper than the SIPP due to there being no admin charges for various events which would be present on the SIPP.

And what events are these?

dunstonh

OK, lets compare a low cost SIPP against a stakholder or equiv personal pension.

Setting up charge on a SIPP. £100. Free with stakeholder
Annual charge SIPP free, SHP free.
Transfers in: SIPP £50 (per scheme), SHP Free
Single contribution in: SIPP £15 each, SHP free
Regular contribution set up: SIPP £15. SHP free
Transfer out: SIPP £50. SHP free
Buying units (comparing only units as SHP/PP can only deal in unit linked funds and not shares) SIPP £20 fee - SHP free

Then we move to commencement benfits:
Set up benefits: SIPP £75 SHP free
tax free lump sum payment: SIPP £75, SHP free
Lump sum payment on death: SIPP Time cost basis, SHP free
Annuity purchase: SIPP £75, SHP free

All SIPP charges have to have VAT added on top.

Those charges were taken from the low cost SIPP provider that Ed promotes very often in the pensions section.