What type of pension?

EdInvestor

To be fair to Deemy, the main difference between a Sipp and a cheap PP is that you can invest in shares and commercial property if you use one, which is not allowed with ordinary pensions.So a direct comparison is not really possible in most cases, as most people who want to invest in funds don't want or need to use Sipps, while most Sipps don't bother providing special deals on funds. The two types of PP are in different markets.

Deemy

dunstonh wrote:

Thats clever. Why not just show one charge of the many there are with SIPPdeal and totally ignore the underlying charges of the areas you invest in.

Seeing as you are just comparing wrappers and not the investments contained within. The charge on a modern personal pension or stakeholder wrapper is nil. So on the wrapper, SIPP deal is £17 p.a. more expensive than a stakeholder (ignoring the other SIPPdeal charges).

yes, I agree its more than charges, .. its also the beng hoodwinked factor

How many people complain about being hoodwinked into a personal pension that never matched what they were told they would get ! Until they get to retirement and find out its nothing like what they though it would be.

With Sipps there is no hoodwinking

dunstonh

How many people complain about being hoodwinked into a personal pension that never matched what they were told they would get ! Until they get to retirement and find out its nothing like what they though it would be.

With Sipps there is no hoodwinking

There is no difference in a personal pension or SIPP as far as that is concerned. Its the underlying investments that matter.

People are not getting what they thought as they forget about inflation, investment returns are lower generally and we just came off the back of a stockmarket crash. Nothing to do with a mono charge contract like stakeholder compared to a multi charge contact like a SIPP.

Murphy_The_Cat

Deemy wrote:

For your retirement planning look at a combination of cash isa's and sipps.

Deemy do you even read what people have written before giving the benefit of your "advice".

The OP has said that she is "completely lost with this finacial jargon" and you pitch in with a suggestion that she takes out a self invested pension plan.
Do you even engage your brain before you start typing ?

I would suggest that you have lost the plot - but I suspect that you never had it to start with.

Susancorsi, make an appointment to see an IFA and ask them a few questions. You will be under no obligation to take there advice but at least you will come awy better informed (you can visit several if you like - the initial advice will be free).

MTC

Pal

EdInvestor wrote:

To be fair to Deemy, the main difference between a Sipp and a cheap PP is that you can invest in shares and commercial property if you use one, which is not allowed with ordinary pensions.So a direct comparison is not really possible in most cases, as most people who want to invest in funds don't want or need to use Sipps, while most Sipps don't bother providing special deals on funds. The two types of PP are in different markets.

I completely agree. So why did Deemy attempt to make the comparison if the two types of saving vehicle cannot be compared as they are for different markets?

As MTC says, time to start reading the original question before typing.

EdInvestor

Nothing to do with a mono charge contract like stakeholder compared to a multi charge contact like a SIPP.

Check here for the likely cost of the "mono charge" contract:

https://www.fsa.gov.charges/tables

and here for the typical costs of a low cost "multicharge" SIPP:

http://www.sippdeal.co.uk/charges.aspx.

"Mono" need not mean cheap and "multi" need not mean expensive.

I would prefer the terms "opaque" and "transparent" personally.

With a Sipp, WYSIWYG.The charges are completely within your own control

dunstonh

The problem when you compare SIPPS and mono charge contracts like stakeholder/personal pensions is that you are not looking at the charges on the underlying investments within the SIPP.

If you invest in funds in a SIPP, there will be annual management charges and usually a bid/offer spread. A stakeholder fund has no bid offer spread and the annual management charge is capped.

You are also comparing a full advice product at maximum cost against a do it yourself product at low cost. Perhaps comparing a stakeholder or personal pension on DIY terms against a SIPP on DIY terms is more appropriate.

If you are going to compare, then do so on a like for like basis. Otherwise the information is useless.

With a Sipp, WYSIWYG.The charges are completely within your own control

Same as a stakeholder and personal pension you mean. However, with a SIPP, those charges are going to be in a number of different places so you need to be aware of where to look.

EdInvestor

If you invest in funds in a SIPP, there will be annual management charges and usually a bid/offer spread. A stakeholder fund has no bid offer spread and the annual management charge is capped.

Who says there will be annual managment charges?Not on the Sipps I'm referring to there won't, regardless of what the money is in. Fund charges are usually rebated as well.

In any case you shouldn't assume everyone who has a Sipp invests in funds, as mentioned before. Sipp stands for Self Invested Personal pension, do of course we are assuming DIY.

dunstonh

Funds have been assumed to allow a fair and equal comparison. Whatever asset you include will have some charges applied to it. Some will be very small. Others could be quite expensive.

I take you back to the OPs first post

I am completely lost with all the financial jargon and do not know even where to begin.

With that in mind, it is highly likely that investment funds would be correct type of investment and in which case, focusing on those in this thread is most appropriate.

Pal

EdInvestor wrote:

WhFund charges are usually rebated as well.

Are you saying that Fidelity/Legal & General/Merrill Lynch etc allow SIPP investors to invest in their funds free of charge?