Is Vanguard S&P500 fund considered a pension fund

farmhillb

I am 50yo and not thinking of retiring for some time. I have a provate pension with Aviva.

Was wondering does anyone know can a person switch a private pension to the Vanguard S&P 500 Fund. Is the said fund considered a pension fund?.
Reason I ask is obviously due to Aviva fees. Current fee is 0.35%. Vanguard fund is 0.1%. Vanguard fund typically increases higher than my own. My fee per year is 0.35*12= 4.2%. vs Vanguard 0.1*12= 1.2%. My Aviva fund typically increase around 8% but with minus the fee + inflation struggling to see the growth. Feeling the growth is in the fees.
Appreciate advice. Looking for a pension fund that tracks the market but is passive and hence a low fee.

Also does anyone know what is the typical fee charged by the like of Aviva for switching a pension from them to someone else.

Alexland

You have an Aviva pension plan/policy which probably invests in an Aviva fund. I would be surprised if your Aviva fee was as high as 4.2% per year - Aviva are usually good value at around 0.5% per year.

Vanguard S&P500 is just a fund, you would still need to buy the platform to provide the pension plan which would be the additional cost of providing the customer service wrap and generally worth around 0.25% per year. Again I think you have misunderstood the Vanguard fund fee.

Also S&P500 and FTSE100 funds are cheap for a reason - they don't provide much geographic or currency spread and contain no other asset classes to dampen volatility.

Jerben

OP
You are misunderstanding fees.
They are per year and not per month!
On your main point... it is a fund, but a very narrow fund.
Everyone would recommend a much broader, more diversified fund(s).

dunstonh

Was wondering does anyone know can a person switch a private pension to the Vanguard S&P 500 Fund. Is the said fund considered a pension fund?.

if your pension plan only allows pension funds than you cannot use any other type of investment instrument other than pension funds.

If your pension plan allows access to other investment instruments, such as unit trusts, OEICS, ETFs etc then you can use it.

Although typically, you would not invest the lot in a fund like that as it would be bad investing.

Reason I ask is obviously due to Aviva fees. Current fee is 0.35%. Vanguard fund is 0.1%.

You need to break the charges down into segments.
Typically you have provider/platform charge, investment charge and adviser charge. With personal pensions, you often fund the investment charge is built into the product charge.

The Vanguard fund charge is not the only charge. You have to add on the platform charge. Currently, you are comparing the Aviva bottom line with just one part of the charges with the alternative. If you were to use the UK's largest DIY provider, HL, then they charge 0.45% for the platform and then you pay 0.1% for the fund. Therefore making 0.55%. vs Aviva at 0.35%

My fee per year is 0.35*12= 4.2%. vs Vanguard 0.1*12= 1.2%.

That is not how charges work and it is incomplete. Annual charges do not get multiplied by 12 as they are already annual charges.

My Aviva fund typically increase around 8% but with minus the fee + inflation struggling to see the growth.

The Aviva fund is giving you a return after charges. If it is increasing at 8% p.a. then that is what you are getting AFTER charges.

Looking for a pension fund that tracks the market but is passive and hence a low fee.

A fund like the S&P500 fund is not meant to be held alone. Single sector funds are for people who want more advanced investment options by building their own portfolio. This will include other single sector funds to give them the diverse spread.

Based on what you have said, you do not seem ready to go to advanced investor options.

Prism

I also wanted to point out that Aviva has a US Blackrock tracker which has 0% charge in its pension fund choice list which has performed slightly better than the Vanguard 500 over the last 5 years. I also wouldn't recommend that fund as your only option though.

The Aviva fees are cheap - 0.35% per year is a good deal. My main pension is with Aviva as the charges for many of the funds are lower than I can get elsewhere.