Help understanding pension charges

beaker141

I'm trying to understand pension charges and hoping you knowledgeable guys can point me in the right direction?

I'm invested through Standard life with this being one of the funds :-

SL BlackRock UK Equity Tracker Pension Fund

http://factsheets.financialexpress.net/SLEFL/RY29_JP.pdf

The pdf states charges are AMC 1% and additional expenses of 0.1%.

If I click through to the underlying fund ( I think)

http://documents.financialexpress.net/Literature/71285903.pdf

Then fees there are stated as 0.01% ongoing charge.

If I look at the same fund on trustnet
https://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=K4F94&univ=P

it then lists a number of unit names, all with differing % charges.

Q1 - what are the unit names - why do they have differing charges and how do I know which one I have - through SL online I cant tell which S number I have?

Q2 - is the 0.01% what Blackrock charge per year for running the fund, and Standard Life then "badge" it up with SL in front and charge 1% AMC to cover all their platform costs etc.

Q3 - How does that compare with levels of fees and what options are there for reducing them. Would a SIPP allow me to do the SL part and then invest directly in the Blackrock index tracker, with its 0.1% fee and then whatever SIPP management charges on top. (e.g. HL has 0.45% fee upto £250k invested)

Q4 - SL once mentioned a discount off the fee - something like -0.31%, is that a discount from the 1% AMC - but if so why is it not visible in my SL account anywhere and is a discount typical.

Q5 - is there a website that allows me to easily rank and compare fund charges, trustnet doesnt appear to have a column.

Thanks for any help.

dunstonh

The pdf states charges are AMC 1% and additional expenses of 0.1%.

Do be aware that the charges on the factsheet will be the gross charge assuming maximum cost. Your scheme could have lower charges. Either due to improved terms offered or fund based discounts.

Q1 - what are the unit names - why do they have differing charges and how do I know which one I have - through SL online I cant tell which S number I have?

In the past, pensions used to have versions. As charges came down over the years the providers would launch a new version which would use a different series for the funds.

Q2 - is the 0.01% what Blackrock charge per year for running the fund, and Standard Life then "badge" it up with SL in front and charge 1% AMC to cover all their platform costs etc.

It can vary with versions but typically, there is a default charge for the internal funds and an additional charge for external. As the SL funds are bundled mono charged funds, they include the charges for the product as well as the fund.

Q3 - How does that compare with levels of fees and what options are there for reducing them. Would a SIPP allow me to do the SL part and then invest directly in the Blackrock index tracker, with its 0.1% fee and then whatever SIPP management charges on top. (e.g. HL has 0.45% fee upto £250k invested)

Impossible to answer without more info. Whilst that is the maximum charge, it does not mean you are on the maximum charge. There are cheaper. I have a couple of Blackrock index trackers in my portfolio at 0.2% with no platform charge. There are plenty of other contracts that are cheaper than the 1%. Including from SL.

Q4 - SL once mentioned a discount off the fee - something like -0.31%, is that a discount from the 1% AMC - but if so why is it not visible in my SL account anywhere and is a discount typical.

Discounts are common. Fund based discounts being most common but also negotiated terms back in the days of commission (not so common with post 2013 arranged contracts but some providers still offer some IFAs improved terms over their standard).

Q5 - is there a website that allows me to easily rank and compare fund charges, trustnet doesnt appear to have a column.

Charges are a secondary concern to investment selection. No point focusing on an extra 0.x% of saving if it costs you 2.x% in returns. Also trustnet will assume default charging. If you have discounts it wont include those and if you are looking at funds that need a platform, it wont include the cost of the platform. Their paid version can but I dont believe the free version can.

jamesd

If using HL note that they cap their ETF and investment trust charges at £200 a year so that can lower their effective platform charge if you use those extensively. There are ETFs comparable to most tracker funds that you'd find.

BlackRock would probably charge SL about 0.06%.Then the SL version adds extra charges for them on top of that to get to the undiscounted 1-1.5% charge. Then they discount from that bundled charge.

At places like HL, you'd buy the class D fund and get the 0.06% charge and on top of that get the HL platform charge.

NordicNoir

beaker141 wrote: »

Q4 - SL once mentioned a discount off the fee - something like -0.31%, is that a discount from the 1% AMC - but if so why is it not visible in my SL account anywhere and is a discount typical.

If your online SL account is like my partners, you can only see contributions made and then totals of each type of fund held and number of units held.

Each month, the discount is added to your account as extra units. You can not see it in a statement as such, but if you track the number of units regularly, you will see the units increase when the discount units are added. You will also be able to work out the number of units/price each time your contributions are added. I then track this extra information on Trustnet, so that I have much more information than Standard Life provide.