Charges:1% a year will wipe out basic rate relief

EdInvestor

http://www.ftadviser.com/FinancialAdviser/Pensions/Comment/article/20091203/e1585da8-de83-11de-a6d5-00144f2af8e8/Something-doesnt-add-up.jsp


Actually it's pretty obvious that pension tax relief is more of a subsidy to the pension services industry than anything else - which is why it's so annoying that the Government claws it back when you retire.

It's time the Government let the pension industry stand on its own two feet.It might even become efficient if it was deprived of its feather bedding.

dunstonh

So what "free" alternative do you suggest?

EdInvestor

dunstonh wrote: »

So what "free" alternative do you suggest?

A lot of people seem to be going for ETFs.In a SIPP with the right fee structure this can be cost effective even for regukar investments.

Not normally offered by IFAs of course.

yelf

Personally I think the article writer should look at the charges on drawdown policies if he wants something worth while to talk about

EdInvestor

I agree, advisors' charges for drawdown are often outrageous, how they can justify 3-5% of the fund for doing a transfer and a standard reinvestment beats me.

Trusted_Friend

In Argentina, when the country hit a debt crisis a few years back, the Government grabbed all the pensions !

Are pension really the best savings for old age ?
With the current debt to UK Government, what is a safe form of saving for old age ? Property ?

dunstonh

I agree, advisors' charges for drawdown are often outrageous, how they can justify 3-5% of the fund for doing a transfer and a standard reinvestment beats me.

Who says advisers take 3-5%?

With the current debt to UK Government, what is a safe form of saving for old age ? Property ?

Pensions are not safe or unsafe. They are just a tax wrapper containing your investments. There is no risk associated with the pension.

michaels

True as far as it goes except that other assets can be more easily moved if need be to something harder for the state to confiscate.

dunstonh wrote: »

Pensions are not safe or unsafe. They are just a tax wrapper containing your investments. There is no risk associated with the pension.

robmatic

Who says advisers take 3-5%?

I was curious as to why I'd seen a sudden glut of transfers to income drawdown policies with a particular life office this week and then noticed on the application form that the commission being paid was 7.5% of fund plus 0.5% trail.

jamesd

Ah, you decided that one go at the Daily Mail story wasn't enough and decided to repeat it when the same person said it again at the ftadviser site, without bothering to use any of the corrections that were made in comments to the Mail version?

As the story says, "Something doesn't add up". Like the numbers used in the story.

Just like the Mail version it uses inflated charges for the pension that aren't necessary, like 1.5% stakeholder charge when they are limited to no more than 1% after ten years and don't normally charge that much.

The Hargreaves Lansdown ISA and SIPP both have the HSBC FTSE All Share Index tracker at just 0.25% annual charge. Identical charges for the two and that means that you're better off with the pension because you get the tax relief as well.

whiteflag_3

robmatic wrote: »

I was curious as to why I'd seen a sudden glut of transfers to income drawdown policies with a particular life office this week and then noticed on the application form that the commission being paid was 7.5% of fund plus 0.5% trail.

yep, the broker consultants I know are telling me this is becoming more of the norm , even 7 + 1% ( I believe its easy to sort out with Skandia). Making hay before 2013 I think!