Personal pension -- where to look?

guymo

My wife and I are trying to figure out what to do with her pot of money in Equitable Life. The transfer value will be around £40k and she is 41. She may wish to make small contributions in the future but has a company pension with employer match for her main current pension savings.

One thing that we know very little about is a personal pension (as distinct from a SIPP). Where should we look to compare options? Cavendish provides a few; the costs are low and the fund range looks okay as far as I can tell. What other providers are there to consider?

Is there value to be had from an IFA for this sort of sum and timescale?

ermine

IFA for this sort of sum and timescale?

No, IMO. Keep costs low - from 41 to 57+ is a 16 years and costs mount up over that time.

Obviously choose your investments to match your view of the world. Even a Cavendish stakeholder should offer you enough choice for that

guymo

Thanks.

The problem I have (or believe I have) is that I can't seem to track down much clear information about these kinds of pensions.

Dunstonh frequently suggests personal pensions rather than SIPPs and has mentioned that IFAs can access them for lower management fees. Obviously one has to offset against that the fee of the IFA, but it's not obvious that using and IFA would be more expensive, and there must be some benefit from talking to someone who knows and understands a broad range of options.

As for DIY, the Aviva personal pension via Cavendish Online looks very reasonable and I reckon I could assemble a decent portfolio of funds within it. Still it seems crazy to jump in without comparing more options, and yet I can't dig up much information.

Does anyone have any further clues please?

bigadaj

There are obviously a range of platforms and providers you can go to directly, as with any investments the main things are charges and choice of investment options, though there may be slight variations in terms of access.

There's certainly no reason why you can't go to an ifa but that costs money. It's a relatively small pot so were back to the rule of thumb of 3% initial charge and 1% ongoing management, if the latter were required. So that's £1200 straight out and anecdotally you might struggle to find one to deal with this as a one off charge.

guymo

That's very helpful; thanks. Sounds like an IFA is unlikely to be worthwhile for this.

As for platforms and providers: that is really my first question. I've only located useful information from cavendish. Most of the actual providers direct you to talk to your IFA and don't reveal their charges. Are there DIY platforms other than Cavendish? There must be but despite much searching I can't find them. It's amazingly frustrating.

dunstonh

Are there DIY platforms other than Cavendish?

Cavendish is a not a platform. They have a limited panel of personal pensions available to buy without an advice charge. They are pretty much unique in this.

guymo

dunstonh wrote: »

Cavendish is a not a platform. They have a limited panel of personal pensions available to buy without an advice charge. They are pretty much unique in this.

That explains (and relieves) my frustration pretty well. Many thanks.

If I understand correctly, this implies that our choice regarding a PP would be Cavendish or via an IFA. Is that right or is there something I'm missing?

Further, it seems the strong implication is that a PP ought to be an advised product. Maybe you (dunstonh) are not allowed to comment? I'm not sure. But if you are I would greatly appreciate it, as well as any comment on the wisdom of a PP for this transfer, as opposed to e.g. a SIPP.

dunstonh

If I understand correctly, this implies that our choice regarding a PP would be Cavendish or via an IFA. Is that right or is there something I'm missing?

Pretty much as buying them direct from provider is likely to be more expensive than both Cavendish or an IFA (even with advice charge)

Further, it seems the strong implication is that a PP ought to be an advised product. Maybe you (dunstonh) are not allowed to comment?

Doesnt need to be advised. Its just a quirk of the market. SIPPs are classed as a higher risk product than PPP. The DIY market has gone more into SIPPs than the advised market. When you DIY, you have less worry (as a company) about mis-sales. So, they do not have consider how the regulator view things or how the FOS will rule. When you DIY, you make the choices. So, an adviser will have a different position to many DIY investors. However, a personal pension can be DIY if it is available to the DIY market. It does not need to be under advice.

bigfreddiel

dunstonh wrote: »

They are pretty much unique in this.

We'll either they are or they're not! How can something be almost unique?

It's like companies saying we're in the top ten - that means they're tenth, otherwise they would be in the top eight or the top five and so on.

Cheers

fj