The Pension Loophole article discussion

johnfthetraveller

gadgetmind wrote: »

The latest changes are a game changer for many people.

I do not understand pensions well enough to comment on your wife's situation, and she may well benefit from the rule changes, but to me it sounds like she's not using the "loophole" that this thread is about. This thread is about putting in money and taking it out this tax year. For anyone contemplating doing that, Martin's article is seriously flawed and misleading. Although the flaw was pointed out several weeks ago, it still hasn't been corrected. To get things wrong is human, but failing to correct it when it has been pointed out is negligent.

jamesd

It appears that the flaw is suggesting a provider - BestInvest - that has charges of at least £480 when the maximum possible gain incurring those charges is £480, so consumers not putting in close to the maximum will lose money on the deal. I've also just reported this error to MSE. Other providers can have lower charges than those.

johnfthetraveller

jamesd wrote: »

I've also just reported this error to MSE.

Do you mind me asking how you reported it?

jamesd

I used the broken link reporting forum because MSE staff would normally check terms before running articles like this, so it's possible that the provider has changed terms or policy.

In your case I also suggest going with a formal complaint about misleading charges because by definition a triviality payment requires taking an income and closing an account so it seems misleading not to have just one charge for the work or to clearly state in the triviality section that and which other charges will also be made.

OldBeanz

johnfrith wrote: »

There is little point in contributing to the small SIPP for many people AFTER the latest change in policy, unless you want to enrich the brokers.

Come on Martin, the article STILL has not been corrected. Surely you have a duty of care to correct the article promptly, before others fall foul of disproportionate charges, as I have.

I guess it is your definition of small. Mine was one to cover her 7 years where she would be left with £5-6kpa of unclaimed allowances until she reached her state pension age. Previously her £20k could not help and now it is the basis over the next 7 years for her to fill that gap.
Anyone not doing their own research with regards to cost/benefits from an internet article does not understand the internet. :beer:

jamesd

At the moment BestInvest is now no longer in the list of pension providers mentioned in the article after the charges report. Always a chance that there will be another update later, though. Thanks for mentioning your bad experience johnfrith!

johnfthetraveller

jamesd wrote: »

At the moment BestInvest is now no longer in the list of pension providers mentioned in the article after the charges report.

By my memory, the article never did mention BestInvest, and Hargreaves Lansdown was only mentioned as having given some input to the article.

So far, I seem to have been the only person to report having tried the "loophole" - surely I can't be the only one.

This site suggests 7 cheap SIPP providers (http://www.moneysavingexpert.com/savings/cheap-sipps). Can anyone report actual fees charged for any of these for using the loophole?

jamesd

If you click on "What company should I set up the personal pension with?" it mentions "Hargreaves Lansdown, or Fidelity". It used to include BestInvest. I'd checked that before making the report, which linked to your post reporting your experience.

gadgetmind

Interesting article from BestInvest.

http://www.bestinvest.co.uk/news/why-the-cheapest-sipp-isnt-always-the-best

"Before opening a SIPP you should always check for any extra costs or fees. Most providers will charge you for things like moving your money elsewhere or taking pension drawdown, but these costs vary between companies and some of the cheapest SIPP providers will actually charge the highest fees. As is the case with airlines, these extra fees can soon turn the cheapest option into one of the most expensive."

johnfthetraveller

gadgetmind wrote: »

"Before opening a SIPP you should always check for any extra costs or fees. Most providers will charge you for things like moving your money elsewhere or taking pension drawdown, but these costs vary between companies and some of the cheapest SIPP providers will actually charge the highest fees. As is the case with airlines, these extra fees can soon turn the cheapest option into one of the most expensive."

Contrast that with this quote from MSE "Loophole" article:

".... Hargreaves Lansdown*, or Fidelity* which have no administration fee, and so would be a good option of setting up a low-cost SIPP for this purpose." (originally included Bestinvest).