Standard Life stakeholder pension - thoughts on funds

civil12345

I'd still apprecaite some thoughts/ comments if anyone has them.

My other dumb question is, how do the charges work on the 'funds of funds' that I have? For example, the largest holding in the Blackrock Concensus fund is 'AQUILA LIFE UK EQUITY INDEX FUND' - do the charges for that particular fund just get absorbed into the unit price of the Concensus fund?

Thanks again

civil12345

Apologies for bumping but any thoughts?

civil12345

I've decided I quite like the Blackrock Consensus fund - all of the funds held within it seem to track their indexes quite well. It's a little heavy UK and a little light US, which I'm also happy with. It's about 81% equities, which is a little lower than I'd like, so I'm going to blend it with a couple of the trackers already mentioned. I'm going to abandon the property fund I think, as I want to keep it as simple as I can. So, something like this...

70% SL BlackRock Aquila Connect Consensus Pension Fund
15% SL Vanguard FTSE* UK All Share Index Pension Fund
15% SL Vanguard FTSE* Developed World ex UK Eq Idx Pn

This gives me around 87.5% equities, quite heavily weighted towards the UK.

civil12345

Apologies for dragging this up, but just trying to get my head around the charges, as overall the stakeholder seems like an 'ok' deal...

Stakeholder

• Charge of 1% per year taken directly from fund price, calculated daily
• Discount of 0.1% on this charge when the balance gets over £25,000, 0.2% if over £50,000 (won't be over £25,000 for quite some time)
• Rebate of 0.4% due to employer calculated by adding to the units each month

I have been checking, and I have been getting 0.4% / 12 added to the funds each month. I'm struggling to work out if this actually equates to a 0.4% rebate, as it's worked out differently to the 1% charge. Let's say it is, so I'm actually paying 0.6% in charges.

In a SIPP, I'd be paying...

SIPP (Hargreaves Lansdown for example)

• 0.45% to HL
• Different charges for the funds I'm interested in
• Vanguard FTSE 0.2% initial and 0.08% ongoing
• Vanguard world ex uk 0.15% ongoing
• Can't find the exact Blackrock Consensus fund (am I being stupid???), but they have a couple of Consensus funds with 0.09% ongoing charge
• The way they deal with feels is slightly different, meaning, I guess it's slightly better to keep a bit of cash in the account rather than having the fee for having units sold to cover costs.

So it seems around 0.54% from the Blackrock and higher for the others.


So the charges seem broadly similar - possibly less with the Stakeholder once the pot grows bigger. I understand I could get slightly lower charges with other companies (Cavendish?).


The reason I'm thinking about this is about making additional contributions, and wondering if I should do this via the stakeholder or via a SIPP. A big advantage of the SIPP would be a greater range of funds available. Also, if I leave this employment I would lose the 0.4% rebate making the stakeholder uncompetitive.


Am I missing anything obvious?

bigadaj

HL are expensive, so there's an opportunity for you to save up to 0.2% on your attend charges with another provider. This will help but depends on your fund size, at £10k then that only translates as £20 a year, by no means life changing but worth having.

If you contribute by salary sacrifice then this would make the employer stakeholder much more attractive, if you do move employment then you can always transfer this out to another provider, your new employer if viable and allowed by them or your own personal pension or sipp.

civil12345

Thanks bigadaj, to be honest I've never really understood the difference between salary sacrifice and just contributing to the pension through pay...how could I tell which it is?

bigadaj

Salary sacrifice is just that, you sacrifice your salary to go into a pension, or other things like childcare vouchers etc

The advantage is that there's no national insurance paid, so this provides an uplift to your pension, more so if the employer gives some of their saving as well.

Smart pension is often used now as an alternative name.

civil12345

Thanks, from looking at a salary calculator, it seems like it's not salary sacrifice, it's just 'employer' so I wouldn't get the extra NI benefit.