Auto-enrolled, should I opt out?

edinburgher

But cheaper than the VLS80.

Can you explain how it's cheaper to be charged 0.3% + £1.50/mth?

For your example of VLS80, I believe OP invests with Charles Stanley Direct. Isn't she paying 0.49%/year with the TER and platform charge considered? With roughly £1,000 invested, shouldn't she be paying less than £5/year in charges?

Are the charges for the same amount in her employer pension not over 2%? 0.3% + £18 as a proportion of £1,000?

Edit: missed this:

Capped at 0.75%. What are yours?

But still dearer than the ISA?

dunstonh

Can you explain how it's cheaper to be charged 0.3% + £1.50/mth?

For your example of VLS80, I believe OP invests with Charles Stanley Direct. Isn't she paying 0.49%/year with the TER and platform charge considered? With roughly £1,000 invested, shouldn't she be paying less than £5/year in charges?

The pension was 0.3% for product/provider/fund. Pension funds use the OCF as the annual charge. So, ignoring the £1.50 you have 0.3% p.a. vs 0.49% (if its CSD). If its not CSD then it will be higher.

The £1.50 is an unknown but with auto-enrolment rules, that is more likely to be initial charge due to annual charge cap. It would be good to know that one way or the other.

You then have the free money from the employer giving you a 100% gain overnight. The VLS wont beat that.

edinburgher

You then have the free money from the employer giving you a 100% gain overnight.

I agree 100%, have always bitten the hand off any employer willing to give me free money

The VLS wont beat that.

VLS held in an ISA won't beat VLS held in a pension. If, however, this is a NEST pension, it won't be an option, will it?

dunstonh

VLS held in an ISA won't beat VLS held in a pension. If, however, this is a NEST pension, it won't be an option, will it?

The same fund in either wrapper would grow the same. However, most pensions have similar funds that do as good a job (or better or worse)

edinburgher

The same fund in either wrapper would grow the same

I appreciate that, but pension would have tax relief as you have already stated.

jem16

edinburgher wrote: »

I appreciate that, but pension would have tax relief as you have already stated.

On which you may have to pay tax on withdrawal. The only gain may be the tax free lump sum.

edinburgher

jem16 wrote: »

On which you may have to pay tax on withdrawal. The only gain may be the tax free lump sum.

Unless you avoid tax on withdrawal