Cavendish Stakeholder (Firendslife or Aviva)? or SIPP with HL?

roimly

Hello,

I have a limited company which I started saving through it 6 years ago. I currently have a stakeholder pension with Friendslife (directly).

I'm thinking of transferring my pension to one of the more cost effective brokers(?), i.e. Cavendish or HL.

With Cavendish I would then need to choose whether I want to invest with Friendslife (i.e. keeping my existing pension but benefiting from the Cavedish discount) or Aviva.
If I read it correctly, both Friendslife and Aviva charge 0.55% (going down do 0.45% as the pot increases my current pension are at around 50K).
I can't post links as a beginner but these percentages are from the Cavendish website.

I've noticed that HL charge only 0.45% for SIPP investors (based on the SIPP charges page on HL site).

Worth mentioning that although I'm not very experienced with investments, as a "financially oriented" MBA graduate I feel comfortable managing my investment myself, however I don't intend to invest in anything but funds (therefore haven't looked at shares dealing charges).

My understanding is that stakeholder pensions are supposed to be cheaper than SIPPs (is that true, is that not the case with HL/Cavedish)?

I would also like advice on which of the three options would suit me best (Cavendish-Friendslife, Cavendish-Aviva, HL-SIPP) based on minimum charges, funds choice (which I assume all three have more than enough for me), with some credit for "slickness of operation" (which HL are familiar for). I currently have ISAs with both HL and Cavendish but I tend to prefer the latter's cheaper fees (hope I'm correct here!).

Appreciate your help in advance!

dunstonh

I'm thinking of transferring my pension to one of the more cost effective brokers(?), i.e. Cavendish or HL.

HL is not cost effective.

With Cavendish I would then need to choose whether I want to invest with Friendslife (i.e. keeping my existing pension but benefiting from the Cavedish discount) or Aviva.

Cavendish may be a limited panel but they have wider options than just those two.

I've noticed that HL charge only 0.45% for SIPP investors (based on the SIPP charges page on HL site).

Then add your fund charge to that.

My understanding is that stakeholder pensions are supposed to be cheaper than SIPPs (is that true, is that not the case with HL/Cavedish)?

Stakeholders are largely obsolete now. Personal pensions tend to be the cheapest option. Stakeholders are more a niche option or for very small amounts.

I would also like advice on which of the three options would suit me best

advice is a regulated activity and the board is not authorised to give advice. It is just discussion and comment only. If you were getting advice then you can pretty much guarantee that none of your chosen options would make the grade as being most cost effective.

grey_gym_sock

cavendish also offer PPs, which are cheaper than stakeholders for a pot around £50k.

zagfles

SIPPs are for people who want to actively manage their pension fund and have a wide choice of funds. HL are competitive for SIPPs at around £50k, they get less so for higher amounts where you're better off with platforms with flat fees like II. But you'll pay the fund charges (typical managed fund is 0.75%) as well as the platform fee. Some funds are cheaper eg if you go for trackers.

For those who don't want to actively manage their pension there are personal pensions, usually better value than stakeholders, Cavendish offer these as well at lower charges than you'd pay for a SIPP.

NewbieGirl_2

Have a look at jameshay.co.uk - this may interest you. DIY modular sipp

roimly

I ended up opening a SIPP account with II.

WoB

What convinced you that was the best option for you?

roimly

WoB wrote: »

What convinced you that was the best option for you?

I can't say I'm 100% convinced but...

Thanks to dunstonh's reply (and additional reading) I decided to not go for another stakeholder's pension. It's more expensive for me as they charge a percentage of the amount compared to a fix fee.

I also decided not to go with HL as they're not cost effective (thanks to dunstonh again).

I saw replies suggesting cheaper alternatives for pots of around 50K but as I keep topping up the pension I expect the pot to increase over time therefore it was important to stick to a fix fee.

So factoring the range of possible investments, several reviews I read and costs I decided to go with II, knowing that I can always switch in the future.

Happy to hear if there's anything I missed/not aware of...

rpc

Don't forget that with a SIPP you have product/platform fees that may be fixed or percentage and then also fund fees that are a percentage. The fee that HL or II charge is not comparable to the cost of the stakeholder or personal pension. You have to add on the fund charge.

With a personal pension, you only have a single percentage fee if you stick to internal funds.

You probably know this, but it doesn't come across in your posts.

I would need to get my pension pot rather large before a SIPP becomes cheaper than my personal pension.

roimly

rpc wrote: »

Don't forget that with a SIPP you have product/platform fees that may be fixed or percentage and then also fund fees that are a percentage. The fee that HL or II charge is not comparable to the cost of the stakeholder or personal pension. You have to add on the fund charge.

With a personal pension, you only have a single percentage fee if you stick to internal funds.

You probably know this, but it doesn't come across in your posts.

I would need to get my pension pot rather large before a SIPP becomes cheaper than my personal pension.

I guess that after being limited by the relatively small choice of the Aviva stakeholder funds (and not being too involved with the investment) I went to the other extreme of having (too?) many options with the hope of being more involved.

If I see that it's not worth the additional charge then I will definitely re-think this over in a couple of year.

I have 25 years or so to go until I retire so plenty of time to learn!