Private pension help

Brightspark87

Hi

The pension switch is not unreasonable advice.

To give you an idea on the fees, thats the ongoing I would charge - lets round it up to £500 a year. For that I would provide you with an annual valuation and you would be able to email / phone and ask any questions. For this new pension switch, depending on the scheme you are moving too I would charge 3% initial so for you that would be
c£2,500. I would then look at moving you into a scheme which including fund costs would be 0.45% ongoing, therefore total charge per annum would be 0.95% or c£817 a year total costs. This plan would then be able to go into the Flexi drawdown if you wished - or just take elements of 25% tax free lump sum.


The fee would be to cover costs of processing the switch itself, meetings, report writing and general cost of the advice.

Now this of course is just an idea for you not advice but hopefully helps? The plan suggest may not be suitable for you either but just gives you another idea of what people offer. Just to confirm an am independent so review the whole of the market.

maximumgardener

Thats OK all good.

get to see couple IFA's and compare what they can offer you to transfer
and monitor your investments going forward
you can always add more contributions in as well as you will be still working PT. even when you stop you can add £240/mth which is topped up by Govt to £300/mth

good luck

:beer:

elduderino2

Hi Brightspark87

Thanks for the reply

Without going over what i have already posted
If you were in my shoes, & you had paid £2500 at transfer plus .05% monthly of fund value(at present £87,217 which comes to £43 a month,or £516 for this year) to the IFA.

Then pay another £3,488 to transfer to another plan(with out knowing how that was gonna pan out)
Approx fees with IFA would be roughly £7,500 over 5 years(allowing for the reduced Fund value in previous years)
Transfer value in 2010 was £58,370, its now valued at £87,217(remember another £3488 to be deducted to transfer again). so after all fee's taken out the fund increase is about £25,350

Would you think you had value for money.

Please excuse the way i am putting it, remember i am a financial knob. If you think i have it wrong please do correct me. all advice welcome.
Also, With those figures could you calculate the percentage increase per year for the 5 years.

Thanks

patanne

Just to put a question you haven't asked!

Have you considered taking some of this pension and using it instead of taking your state pension? As you are taking it under the old regs for every year you defer it's value increases by 10.4% plus of course any 'normal' increase (don't take the deferment lump sum though it isn't such a good deal).

Also to be considered is the fact that you can get 25% tax free, whereas with your other income you would probably be paying tax on all of your state pension. This is only a good idea if you are in good health of course.

elduderino2

Hi patanne

Good point .
You just reminded me. I read that on the state pension site, but never thought of applying it to this situation.
Will certainly bear that in mind.

Thanks
PS: excellent health to boot.

maximumgardener

indeed....deferring your SP
....a very good option so as to enable you to minimise your income tax position .......
exactly sort of thing to consider & one factor in many in managing future income streams

Brightspark87

elduderino2 wrote: »

Hi Brightspark87

Thanks for the reply

Without going over what i have already posted
If you were in my shoes, & you had paid £2500 at transfer plus .05% monthly of fund value(at present £87,217 which comes to £43 a month,or £516 for this year) to the IFA.

Then pay another £3,488 to transfer to another plan(with out knowing how that was gonna pan out)
Approx fees with IFA would be roughly £7,500 over 5 years(allowing for the reduced Fund value in previous years)
Transfer value in 2010 was £58,370, its now valued at £87,217(remember another £3488 to be deducted to transfer again). so after all fee's taken out the fund increase is about £25,350

Would you think you had value for money.

Please excuse the way i am putting it, remember i am a financial knob. If you think i have it wrong please do correct me. all advice welcome.
Also, With those figures could you calculate the percentage increase per year for the 5 years.

Thanks

I think the fees are a little high but have you asked them to justify? For example if someone asked me to explain I would go through the time taken for the original advice, ongoing service and then the potential new advice.

I would also compare the old plan costs and charges and new ones along with the performance so you can see the value.

I also am not sure where this IFA is, but having moved from being an IFA in the city of London to Bristol are fees are less than London based firm.

I cant really say and black and white yes or no but like I said have an honest conversation and explain that you feel the fees are a little high and you would feel more comfortable with a slightly lower initial fee. I think a max of £2,580 or 3% would be acceptable. Also check they are a) whole of market or independent b) what they provide you for ongoing service. Sometimes tied agents or restricted advisor's can have less flexibility. However, the performance isn't bad over the 5 years - so you need to look at the overall VALUE of advice ie not the cheapest but done a great job.

elduderino2

Hi Brightspark87

Thanks for the reply, & advice.

I have had a meeting with the IFA this morning. Yes they are whole of market/Independent. They are listed on Unbiased.com
Without going into to much detail. They have come up with an LV flexible transitions account. Overall fees would be 0.90%.
Money invested in
Sterling Liquidity series 2 50% £41,979.36
Vanguard LifeStrategy 20% Equity(series 2) 50% £41,979.36
their charge being £3,498.28 taken from the transfer value of £87, 457.00

I asked them to give me a written summary of what was planned. Their reply was can't do that unless you agree to the plan, in other words give us the £3498.28, & yr get a written summary.
To be honest i can,t be bothered to negotiate with them regarding fee's. I think they have had enough out of me.
Another small thing that bothered me was that i mentioned at the last meeting( The reason for this thread), the fact that i had invested an amount in a 5 year bond with a foreign owned bank(With branches in this country). Without hesitation they said it was not covered by the Bank compensation scheme. It is, that was one of the first things checked before taking it out. Were they offended that i had not come to them to invest it!! is that me being suspicious?
The fact that they told me that Zurich did not do Flexi Draw down. They do. in fact got loads of info from Zurich. Plan cost's & charges. & how its performed each year over the 5 years. In fact sending all info by post.
As you say the fund ain't done to bad, its the fee's that are high.
But also remember, i started this pension plan in 1991 with AXA, with no IFA, & it took 19 years to go from £0 to £58,370.
So both Zurich, & the IFA hit the ground running.. I would give my eye teeth for customers like that in my business.
So, i think its time to check out a couple of IFA's, an see what they come up with. The providers don't want to deal with customer's, only IFA,s
Also the S/P deferment looks inviting, 10.4% in one year ain't bad.

Can anybody recommend an IFA in the Tamworth, Lichfield, & Sutton Coldfield area's

Thanks

dunstonh

I asked them to give me a written summary of what was planned. Their reply was can't do that unless you agree to the plan, in other words give us the £3498.28, & yr get a written summary.

Or looking at it another way, you want to take the advice without paying for it.

The fact that they told me that Zurich did not do Flexi Draw down. They do. in fact got loads of info from Zurich. Plan cost's & charges. & how its performed each year over the 5 years. In fact sending all info by post.

Zurich do flexi drawdown but do they do it on your plan. Most of their old plans do not.

The providers don't want to deal with customer's, only IFA,s

There are providers that cater for the DIY market but they are different to the ones that an IFA would use.

elduderino2

Hi dunstonh

Thanks for the reply.

Or looking at it another way, you want to take the advice without paying for it.

Okay mate yr got me bang to rights ,
Scrooge ain't got nothing on me mate.
If you could see me now sittin here in a dressing gown, green eye shade on me ed, & lit up by candle. countin me ill gotten gains, one doubloon, two doubloon.......

How did i ever fink i woz gonna get away with it.

Cheers