AMC for Aviva Stakeholder Pension

Iqbar

Looking to start my first pension, and was attracted by the low advertised rate of a stakeholder pension at Aviva. According to Cavendish, the annual management charge is 0.55% for funds at my starting level (<£50k) when applied for online - but when I go direct to Aviva (which should cost the same according to Cavendish - I cannot paste the link here as a new member unfortunately) I am quoted 0.9% when I fill in my details for an 'illustration'.

Does anyone know what this charge varies on? I'm young (mid 20s) and was hoping to pay in around £200/month with an initial deposit of £1000 or so. Does paying in more/less vary the charge? Am I bound to be charged this higher than advertised rate because of my age/gender/some other fact about me? I've not managed to find anything helpful on the Aviva site and wondered if anyone else had relevant knowledge or experience - or alternatively, a cheaper stakeholder pension which they would recommend.

bigadaj

Most form of investment products are actually cheaper if you use an intermediary, so you need to go through cavendish or soemone else, though it has been mentioned that they have suspended their offerings currently.

I thought these offerings were personal pensions rather than stakeholders, but so long as they are low charging and have a decent range of investment options then it shoulde fine if you know what you want or are prepared to learn a little about investments.

dunstonh

when I go direct to Aviva (which should cost the same according to Cavendish

You wouldnt expect it to be the same. You would expect Aviva to increase the charge to cover the cost of their distribution. Not to retail it on nil commission/nil fee basis.

I am quoted 0.9% when I fill in my details for an 'illustration'.

That sounds about right for a direct to provider cost.

Does anyone know what this charge varies on?

The cost of distribution. Much the same as why a tin of beans costs a different amount at different retailers.

was hoping to pay in around £200/month with an initial deposit of £1000 or so.

That is personal pension territory. Not stakeholder pension.

Does paying in more/less vary the charge?

No. However, the value of the investment does. The more you pay in, the quicker the value goes up.

Am I bound to be charged this higher than advertised rate because of my age/gender/some other fact about me?

No. Its just a different shop.

or alternatively, a cheaper stakeholder pension which they would recommend.

I cant recommend anything given my status but it would seem that a niche option like a stakeholder pension is unlikely to be best given what you have said. A personal pension seems more appropriate.

Iqbar

dunstonh thanks for that response - very helpful indeed!

The thinking behind starting with a stakeholder pension is that they tend to have lower management charges at low portfolio levels - I would transfer into a personal pension once the portfolio level was high enough that a personal pension was better value. I'm still looking into all options, but I don't need the higher flexibility of a personal pension over a stakeholder pension - I just want to stick money into a diversified set of index funds and not worry about it too much, primarily to claim the tax relief.