Pension decisions to make

Yorkshirebornandbred

Hi,

I wonder if anyone can shed some light on Pension charges.

I am 52 years of age and starting to shine a light on our pension arrangements so that I can make sure we are prepared for the big day in 8 to 13 years.

I have a stakeholder pension and sipp with Friends life and my wife has a stakeholder pension (all originally set up with AXA in 2007 through a financial advisor) All of the funds are invested in unit linked funds and there is quite a large 6 figure sum invested in total. At the moment we feed £832 per month into these funds directly from our small business. The stated yearly charge on these funds is 1%.

We are now in a position to make 1 large additional contribution @70k and up the monthly contribution to 2k. If we do these through Friends Life will some of our funds still be going to the original financial advisor (through commissions) or will we just have the1% fund management charge. I am asking because I am trying to decide whether to put this additional pension monies through the stakeholder plans or set up a separate low cost sipp which I will self invest?

Any help would be appreciated:)

mania112

Step one: Make sure you don't contribute beyond the annual allowance. This tax year the limit per person is £50,000, next year (from April 2014) the limit falls to £40,000.

Step two: Call Friends Life and ensure there are no fees paid to a financial adviser. If you're not receiving any ongoing servicing, you want to see if it can be removed, if there is.

Step three: Consider the charges on your pensions and lean towards contributing into the cheapest, or consider cheaper alternatives in the market.

Step four: Ensure you are invested in an appropriate range of funds in line with your attitude to risk.

Step five: Use a pension calculator to estimate what your retirement income might be and match this to your estimated requirements.

kidmugsy

Yorkshirebornandbred wrote: »

We are now in a position to make 1 large additional contribution @70k

Do you mean that you want to add a lump sum of £70k to your pension?

Will you have earnings of £70k in this tax year?

Yorkshirebornandbred

Thank you for your response mania112.

Step 1 - checked and we are ok for this year as we can use previous years contribution allowance as well.

Step 2 - Will do that tomorrow

Step 3 and 4 - This is what I am doing now. Seems my costs will be lowest in an Interactive Investor Sipp which does not charge on a percentage basis. Just need to pin down the true costs of these Friends life schemes before making decisions

Step 5 - I have done this and this is what has led me to increase the pension contributions to achieve our desired level of income or thereabouts.

Once again thanks for the quick response.

Yorkshirebornandbred

kidmugsy wrote: »

Do you mean that you want to add a lump sum of £70k to your pension?

Will you have earnings of £70k in this tax year?

Yes because there are two of us and we can split the £70k between us.

Thank you

kidmugsy

Yorkshirebornandbred wrote: »

Yes because there are two of us and we can split the £70k between us.

Thank you

But you originally said "We are now in a position to make 1 large additional contribution @70k". Now you say it is two. Is this the famous Yorkshire mutton-headedness in action?

Yorkshirebornandbred

kidmugsy wrote: »

But you originally said "We are now in a position to make 1 large additional contribution @70k". Now you say it is two. Is this the famous Yorkshire mutton-headedness in action?

No just poorly explained. My wife and I are able to share the 70k contribution across our plans.

atush

It was clear to me, I must be a closet Yorshireman

kidmugsy

Yorkshirebornandbred wrote: »

No just poorly explained. My wife and I are able to share the 70k contribution across our plans.

Sorry for snapping at you. Now, on other threads I see that the firm Cavendish Online seems to be reckoned a good route to personal pensions. They apparently will be launching a new SIPP soon
http://www.cavendishonline.co.uk/pensions/self-investing-personal-pensions/