Scottish Widows Retirement Account compulsory £650 fee

jem16

Kua wrote: »

And in any case I have that info available so can avoid those with high charges...

You seem to be basing your choice solely around charges and not around what would be the best choice of funds for your investment strategy.

Whilst charges are obviously a consideration, it shouldn't be the be all and end all.

Kua

jem16 wrote: »

You seem to be basing your choice solely around charges and not around what would be the best choice of funds for your investment strategy.

Whilst charges are obviously a consideration, it shouldn't be the be all and end all.

Well this conversation has been based solely around charges I'm not yet in a position to pick the funds but I do have a plan and a SIPP would be the greatest amount of choice. Thanks dunstoh, I think I get that now... But need to give it more thought.

dunstonh

But I'm investing solely in trackers (so low management fee) and there is no charge for investing in a fund according to this: http://www.hl.co.uk/pensions/sipp/ch...interest-rates

There is no additional charge but you have to add the fund OCF to the 0.45% platform charge to give you the total annual charge.
So, if you picked the Vanguard US equity index fund you would have the following charges:

HL platform charge: 0.45% p.a.
Vanguard OCF: 0.20% p.a.
Total annual cost: 0.65%.
(some trackers have dilution levies so you need to include those)

We also offer up to a 5.5% saving on the initial charges made by the fund manager"

That is either marketing speak designed to appeal to inexperienced investors or HL havent updated their website and have left obsolete information behind. There are no initial charges on funds nowadays unless they are soft closed.

As for personal pensions, you have the likes of Aviva on their personal pension that is 0.7% falling to 0.40% with fund based discounts on their old personal pension plan (but still available for new business). Or their more recent plan which has a platform charge of 0.3% on first £249,999 and 0.20% above with other tiers available. funds available from 0.1%. So, 0.4% to 0.25% total. AXA Wealth retirement account is well priced on 50k plus and can be marketing leading on large amounts falling to 0.15%. Although not effective on small amounts. And many others.

jem16

Kua wrote: »

Well this conversation has been based solely around charges I'm not yet in a position to pick the funds but I do have a plan and a SIPP would be the greatest amount of choice.

I think your choice should be the other way round. Choose the investments first and then find out where you can get them cheapest.

Kua

jem16 wrote: »

I think your choice should be the other way round. Choose the investments first and then find out where you can get them cheapest.

Noted. But circumstances change and a SIPP has the most flexibility for that...

dunstonh

Kua wrote: »

Noted. But circumstances change and a SIPP has the most flexibility for that...

How much of that flexibility are you going to use? Especially as all indications are that you are starting with a small amount.

Just because it can invest in nearly 30,000 options, doesnt mean you are doing to use 30,000 options. Those plans offering 2000 options can still be overkill.

jem16

Kua wrote: »

Noted. But circumstances change and a SIPP has the most flexibility for that...

Flexibility to do what exactly?

rpc

My personal pension has a nice booklet with all the fund options in it. Probably a few hundred. I use 5. Perhaps, in the life of the pension, I might use 10.

Why do you need thousands of options?

Should I decide that I really need eleventymillion options, I can always transfer out.

As for cost, mine is 0.5% all-in if you use internal funds. That drops as the pot increases.

Why can't you satisfy your requirements with a personal pension? If you can't answer that, then a SIPP probably isn't what you want.

Your_Hero

Always nice to have a real life example, thanks for sharing rpc.

OP, if it is trackers you are looking to invest in then SIPPs won't give you much more than personal pensions. The real benefit behind SIPPs is that they allow you to invest in much more than funds and allow you to invest directly in equities, commercial property etc. And at £200 per month, I highly doubt you will make use of those any time soon. You may find cheaper contracts using PPs as you seem to be extremely concerned about cost.

Of course, decision is up to you as you seem to have gone against most suggestions so far.

SallyG

Kua - off-piste forgive - just out of curiosity I've scrolled through the Scottish Widows Retirement Account stuff online and been unable to find any mention of a £650 joining fee - you will have looked harder and it still surprised you - have you ever found that charge expressed in writing upfront on the website?
Who told you you'd have to pay £650 to join?