Pension charges - does this sound about right?

greggymagic

dunstonh wrote: »

Over half of new advisers into the industry fail within 2 years.

What - is that the honest ones? :-)

Don't you mean "Only 2.5 percent monthly for the first 2 years" fail..... That's more like IFA wording.

I'm sorry I'm only joking on the above and if you saw me you'd see I'm saying it with a smile and mean no offence.

I just feel the charges are all a bit stealthy - I'm sad as I actually read the policy document from cover to cover but somewhere along the lines I just didn't spot that Establishment charges are compounded I thought it was 0.35 of monthly contributions. So instead of paying 0.35 percent of my first months contribution I've actually paid 21 percent of that first contribution.

Why can't they just put:

"Establishment charges will be 0.35 percent - this will have an effect of reducing your total contributions by about XX percent over the course of the first 5 years"

Or even - "You will be charged 0.35 percent every month on the total value of your contributions to date for the first 5 years"

Cheers

dunstonh

I just feel the charges are all a bit stealthy

I have seen the illustration for the product you have. The illustration is quite clear. However, I was never keen on the version you had for regular premiums. It was better with long term single premium/transfers. It frequently came top on cost comparisons for single contribution back in the day.

That type of contract would fail RDR requirements now. That is why it was withdrawn in around late 2011/early 2012.

greggymagic

dunstonh wrote: »

I have seen the illustration for the product you have. The illustration is quite clear. However, I was never keen on the version you had for regular premiums. It was better with long term single premium/transfers. It frequently came top on cost comparisons for single contribution back in the day.

That type of contract would fail RDR requirements now. That is why it was withdrawn in around late 2011/early 2012.

Thank you

Cheers

greggymagic

One further thing - IF I were to make a one time pension contribution (For Example £10,000) Would the Establishment charge of .35 percent a month for 60 months be levied on this thus effectively costing me 21 percent of the one off payment over 5 years?

Am I better putting the one off payment with another provider in a SIPP?

Cheers

zagfles

greggymagic wrote: »

One further thing - IF I were to make a one time pension contribution (For Example £10,000) Would the Establishment charge of .35 percent a month for 60 months be levied on this thus effectively costing me 21 percent of the one off payment over 5 years?

Am I better putting the one off payment with another provider in a SIPP?

Cheers

As I understand these sort of schemes you probably would pay the charge for one-off contributions. I'm sure one of the resident IFA's with experience of selling this sort of scheme will correct me if I'm wrong and then go on to say SIPP charges are high:rotfl:(usually around 1 to 1.5%pa depending which SIPP and what you invest in - will seem dirt cheap to you!).