Which pension providers have low charges?

bye_bye_band_G

I'm 56 and have always been a stay at home mum so have no pension provision of my own. It's not a problem, my husband is quite a high earner and his pension when he retires will mean we'll be comfortable.

I've known for a while that I could invest a small amount into my own personal pension and even as a non-earner I will get tax relief credited - £2880 of my own money this year I believe. But I've never done it so far because I didn't want anything to do with annuities, but now the rules are changing and I could take it as cash lump sum(s), starting one seems like something I should do before the end of the tax year.

A simple situation then, and I will want it in very low risk investments of gilts and bonds, and look to repeat the £2880 for the next few years before cashing it in.

My question is about charges, which providers will give me a good deal for my simple situation. I don't know how to understand the charging system - Virgin I think were well known for cheap simple pensions but charge 1%, whereas others charge less at first glance, but I think that's probably not the whole story! Can I ask on here for recommendations for a simple pension with low charges, or am I getting too deep into asking for financial advice? My situation is so simple I don't want to pay for an IFA.

Thanks for any help.

HarryD

I have mine with Hargreaves Lansdown. However, there are probably others who are cheaper for small pots. But have a look at the Hargreaves website as it is clear about charges etc, and you will then have something against which to compare others.

greenglide

Cavendish online?

Virgin is simple but has never been cheap.

bye_bye_band_G

Thanks, I am currently looking at Cavendish Online.

Under the new rules after April, could I just put in £2880 a year, wait till the tax relief has been added, then take out the approx £3600?? And do the same every year?? Surely that is too good to be true.

kidmugsy

bye_bye_band_G wrote: »

Thanks, I am currently looking at Cavendish Online.

Under the new rules after April, could I just put in £2880 a year, wait till the tax relief has been added, then take out the approx £3600?? And do the same every year?? Surely that is too good to be true.

HL's charges for this sort of thing are pretty good but there's quite a penalty for cashing in within a year. Have a look at their site.

clivep

bye_bye_band_G wrote: »

Thanks, I am currently looking at Cavendish Online.

Under the new rules after April, could I just put in £2880 a year, wait till the tax relief has been added, then take out the approx £3600?? And do the same every year?? Surely that is too good to be true.

You can indeed do this and it is the "loophole" that's been discussed on this forum. However, beware of the fees that you may have to pay for this and any minimum periods applicable.

I set up and cashed in 2 pensions this year and I used a Virgin stakeholder and H-L for these. Although Virgin has a 1% annual charge on it's funds there were no charges for cashing it in. H-L fund charges were lower at 4.5% but there was a £90 charge for the payment + £30 account closure fee (although I got them to waive this).

No stakeholder plans that I looked at had any closure charges but other than Virgin they all had minimum periods of over a year.

BE AWARE that H-L have now introduced an early account closure fee of £295 + VAT for closure within 12 months!

Have a look at Fidelity as they only have a 0.35% service fee and have no other admin fees. I used them to facilitate the splitting of a larger SIPP with them to do the partial transfers to Virgin and H-L.

bye_bye_band_G

clivep that is very useful, thanks. Virgin are worth considering then.

A couple more questions, if people are kind enough to help?

I keep thinking I could do these little pensions multiple times and get my tax relief, then just take it all out every three years or so to keep under the Personal Allowance. Everything would then be tax free. But I read that you are only allowed to have three Small Pension pots under £10,000 where you can cash in full. Is this still going to be the same after April 2015? I thought you could cash in full a pot of any size then. And will there still be a limit of three times?

Also I see references on here to 'recycling rules'. I think this might be what I would want to do - cashing in and starting up a new pension? What does this refer to and how can I find out what these rules are?

clivep

The 3 small pots rule is for this year only... no restrictions from next year. The recycling rules only apply to larger amounts.