Commission or Fees IFA for lump sum?

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
2 replies 594 views
jaypejaype Forumite
349 Posts
Hi - my business partner and I have Aegon pensions through our company, into which we pay around £800 a month each. These were bought using our IFA.

However, we have surplus funds in the company this year and to avoid having to pay higher rate corporation tax (we don't usually do this well, by the way) and because neither has much of a pension and are heading for our 40s, we are going to put in 30k each.

So - we have two options. Either we can go down the commission route, paying £900 immediately, £156 in year 2 and each year thereafter to year 10 when it goes up to around £232 a year then down to £46 a year when we hit our 60s, or we can pay a straight fee.

Probably a daft question but what would be best? Thanks.


  • Loughton_MonkeyLoughton_Monkey Forumite
    8.9K Posts
    Hung up my suit!
    Well surely it depends upon the fee?
  • dunstonhdunstonh Forumite
    106.7K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    All Aegon's current personal pensions are fee based. Only their stakeholder pension is commission based and some of their legacy plans (that still allow top ups). How old is your personal pension and is the charge fee based or commission based?

    With limited companies, its often better for the fee not to be paid from pension but by the limited company. You can claim it as a business expense (consultation and arrangement for company pension arrangements) therefore reducing corporation tax and NI (if you were to draw it out first). You could increase the pension by the amount of the fee and the IFA can collect it that way if you prefer to just show it only as pension. The net outcome is the same.
    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.
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