F.A. included me in Pension w/o my permission.

bigadaj

To put the other side for the OP, the charges you quote are for the total sum value- you shouldn't think that the charges are taking the majority of your contributions as the charges would be the same with no contribution. They are purely based on the fund value.

I'm currently querying whether I can make partial transfers out of my GPP to place into lower cost tracker based PP or SIPP but think this may not be allowed, and as ghifa says, it's not worth losing the employer contribution for the small savings in costs.

dunstonh

A charge of £1,820 from an annual contribution of £2000 from a £100,000 fund seems awful.

Savings accounts have a net interest margin typically in the range of 0.9% to over 3%. The higher the interest rate, the higher the implicit charge on a savings account. Banks dont have a particularly high net interest margin currently but when rates are higher they will be higher than the 1.82%.

Investment funds have a fixed charge they disclose and it is that charge whether they fund makes 1%, 10% or loses 10%. The provider cannot change it to suit themselves. Unlike savings accounts.

buel

bigadaj wrote: »

you shouldn't think that the charges are taking the majority of your contributions as the charges would be the same with no contribution. They are purely based on the fund value.

This opened my eyes and I now see this scenario as it is. I was foolishly viewing at as the charges v. contribution ratio.

Thank you so much for all this help, all of you!

jamesd

bigadaj wrote: »

I'm currently querying whether I can make partial transfers out of my GPP to place into lower cost tracker based PP or SIPP but think this may not be allowed

Good luck with that, I asked and found that I could from my SL GPP. Which greatly increased the amount I pay into it, because otherwise most of my money wouldn't be going into that GPP at all and the employer wouldn't be saving some of their employer NI in this salary sacrifice scheme. But I think standard SL terms are you can't do it.

However, if your employer is covered by auto-enrolment legislation you have another tool available now. Your employer is required to accept withdrawing and re-joining the scheme. So even if they don't want to allow it, I think it's now possible using that bit of trickery to get it done. Which might perhaps be another argument to use for them making it easy to do.

bigadaj

jamesd wrote: »

Good luck with that, I asked and found that I could from my SL GPP. Which greatly increased the amount I pay into it, because otherwise most of my money wouldn't be going into that GPP at all and the employer wouldn't be saving some of their employer NI in this salary sacrifice scheme. But I think standard SL terms are you can't do it.

However, if your employer is covered by auto-enrolment legislation you have another tool available now. Your employer is required to accept withdrawing and re-joining the scheme. So even if they don't want to allow it, I think it's now possible using that bit of trickery to get it done. Which might perhaps be another argument to use for them making it easy to do.

You don't get if you don't try, we're with Scottish widows. I got a response from my hr to contact the company's FA, so I will try him but he's not been the most proactive in my limited dealings with him.

DavidLaGuardia

bigadaj wrote: »

I dislike this analogy as it smacks of the smoke and mirrors of financial professionals. To be fair to banks, which none of us like to do, I don't care whether they are efficient or have costs, this makes no difference to a quoted rate that I will receive.

Investment returns are subject to additional costs that are frequently not obviously stated, and in the small number of cases where the fund manager, for example, is happy to take some of he risk he wants the gain on top of the base charges, not instead of.

You make a fair point about the addtional costs which arise from turnover and paying the costs of trading which are becoming more transparent now, but they are not part of the revenue coming into whoever is managing the funds where the quoted amount is the annual charge.

The analogy you criticised is, in fact, a good one and it would be fair to say there is LESS transparency when it comes to savings accounts. Effectively your money is wrapped up in a business (the bank) and the interst is a rent on the use of your money but there is a wide margin above that. In a pension or unit trust etc, the situation on costs is somewhat reversed and you are particpating in the ownership of businesses (in the case of shares) and paying a fee for this. The fact that one cost of participation is explicit and the other is implicit is neither here nor there.