Comparing charges

webnibbler

I'm looking to transfer my various old pension plans into one plan. But it seems very difficult to compare charges to find the best value provider. I'm looking at keeping my current personal pension with Standard Life or openning a SIPP with HL. But comparing the TER is not easy.

Which one is likely to be cheaper and do charges make that much difference in the long run (25+ years)?

jem16

webnibbler wrote: »

Which one is likely to be cheaper

What are your current charges?

and do charges make that much difference in the long run (25+ years)?

They can do but what makes the biggest difference is the quality of the investments within the pension wrapper. You haven't actually said anything about those investment funds.

webnibbler

Currently everything is in the SL Balanced Managed fund. But I would like to take a more hands on interest in where the 44k value is invested.

Between the two providers, looking at the M&G Recovery fund for example, which both providers offer, HL would appear to be cheaper. But I'm not sure it's the full picture of the charges.

dunstonh

But it seems very difficult to compare charges to find the best value provider

With legacy plans that are multi-charge, it can be. That is why most IFAs use software to do it. With modern plans, its much easier normally.

I'm looking at keeping my current personal pension with Standard Life or openning a SIPP with HL. But comparing the TER is not easy.

Actually, comparing TER is the easy bit. On pension funds, the AMC is the TER. On unit trust/OEICs, you need to look at the TER.

Which one is likely to be cheaper and do charges make that much difference in the long run (25+ years)?

HL is quite an expensive SIPP in respect of value for money. It keeps the IFA trail commission but doesnt give any IFA servicing and it keeps the platform commission(which is fair enough). However, you do not typically use a SIPP to save money. You use it to access better quality and a wider range of investments. Some may be cheap but that is usually a secondary objective.

fairleads

dunstonh wrote: »

Actually, comparing TER is the easy bit. On pension funds, the AMC is the TER. On unit trust/OEICs, you need to look at the TER.

It would be if the TER included all charges, such as back handers to platform providers et al, and brokerage costs incurred on portfolio rebalancing. Unfortunately they don't, in which case TER is at best only a loose guide to total fund expenses.

gadgetmind

webnibbler wrote: »

But it seems very difficult to compare charges to find the best value provider. I'm looking at keeping my current personal pension with Standard Life or openning a SIPP with HL. But comparing the TER is not easy.

HL are high cost unless you *really* need the SIPP bells and whistles. Perhaps you could also consider a PP or stakeholder via Cavendish Online? Very low fees and a good choice of funds with some providers (though not a patch on the likes of HL and Skandia)

Which one is likely to be cheaper and do charges make that much difference in the long run (25+ years)?

Charges make a huge difference, but even more so does a sensible asset spread and methodical rebalancing.