Virgin stakeholder pension management charge?

Chevey1

I'm 50 years old and I invested £62,000 between 2001 and 2005 into Virgin Stakeholder pension. I have not invested any more money into this pension since 2005. Looking at the value in January 2018 it is now worth £157,400.
My understanding of the Virgin Stakeholder Pension is that Virgin charge 1% of the total fund so £1,574 per year. This seems a lot of money considering the pension is just an Index Tracking fund.
I'm thinking of moving this money to another provider, so this leaves the question of who to use.
I would like to continue to invest in a tracker. (Not sure UK)
I was thinking of using Interactive Investor who looks to have the following charges
1) £120 Management charge, £90 annual charge for fund/Shares = £210 per year
And then invest in Fidelity Index tracker 0.07 costs which would cost = £110 per year
This would make the total yearly costs £320 saving me £1254 per year
So this leaves me asking three questions
Q1) Is my understanding correct?
Q2) The UK stock Market is very high FTSE 100 Index (7,730) would it be worth investing in another non-uk based tracker?
Q3) Is there a better option?

As you can see my knowledge on Pensions is not that great so any help given is appreciated.
:j

Alexland

Yes you are paying a lot to Virgin and you could transfer to a cheaper stakeholder from Aviva via Cavendish.

https://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/aviva/

Cost isn't everything - a 100% shares investment will be very volatile and you might be more comfortable and have a more predictable outcome by investing in a range of asset types (such as bonds, property and cash).

However it might be cheaper for you to move away from stakeholders to a SIPP and invest in a low cost and globally diversified multi asset fund such as the Vanguard LifeStrategy, HSBC Global Strategy, Blackrock Consensus or L&G Multi Index series.

You can look at the data sheets to see the UK equity but it generally ranges from 5% to 25%. I don't know anyone on these forums that advocates as much as 50% UK bias.

You would need to understand your volatility tollerence to find the right fund asset type mix in the series. For example are you ok if your investment drops 50% and takes years to recover? If you plan to buy an annuity you might need to be more cautious as the valuation at the point of purchase really matters.

For your valuation then yes hold your funds in a fixed price SIPP such as II or iWeb / Halifax SD but be aware the FSCS compensation is limited at £50k per financial institution.

Alex

dunstonh

My understanding of the Virgin Stakeholder Pension is that Virgin charge 1% of the total fund so £1,574 per year. This seems a lot of money considering the pension is just an Index Tracking fund.

Correct. It was standard priced on launch and was way behind by around 2006 (when you could get 0.6%

It was also a bad investment option as well. People bought it for the brand but they were let down.

Q2) The UK stock Market is very high FTSE 100 Index (7,730) would it be worth investing in another non-uk based tracker?

Is the FTSE100 high? It is only 10% higher than what it was 20 years ago. If you take inflation into account, it is actually lower.

Investing in a single sector is bad investing. You are putting all your eggs in one basket.

Chevey1

So I like the look of Vanguard as the management fees are low and it has diverse global investments
I have been fortunate over the years and I own my house and have been paying into pensions over many years after working in many organisations . My existing pensions are:

1) Blackrock 30:70 index worth £211,481
2) Aviva worth £5,888
3) Virgin Stakeholder worth £157,800
4) NHS pension final salary predicted 4,928 lump 1,642 per year.
5) LPFA predicted 10,181 lump and £3,393 per year
So I'm looking to retire at a maximum of 65 and I was looking to transfer the virgin stakeholder pension to a SIPP and then invest in either a LifeStrategy 80% Equity fund or a Target Retirement 2030 fund So this leaves me with three questions that I need help with:

Q1) What fund is more suitable LifeStrategy 80% or Target Retirement 2030, they seem very similar,
Q2) What fund would you invest in if you were me, (I will not hold your advice against you)
Q3) I'm going to choose the platform Interactive Investor as Vanguard platform does not support a SIPP. Is this a good idea?

I really appreciated any help anyone gives me as previous comments have been very helpful.

Joey_Soap

Myself, I think are being very sensible. Only thing I would say to you is that I would consolidate any defined contribution plans that you have into the one SIPP. That way you minimise costs and everything is in one place. II will be ideal.

I would not worry about the mention of a GBP 50k on compensation. Your investments will be held in a segregated pot within the SIPP for your benefit. Barring out right theft or similar, even if the platform goes bust, your investments will still be secure. Nothing is 100% risk free, but that is one thing not to worry about, I believe.

EdSwippet

Chevey1 wrote: »

Q1) What fund is more suitable LifeStrategy 80% or Target Retirement 2030, they seem very similar,

LifeStrategy. Target Retirement funds automatically transition from equity to bonds as you age. This would be useful if you plan to buy an annuity, but these days most people opt for drawdown instead, because annuity rates are horrible. (If it turns out later on you do want to 'de-risk' your pension for some reason, you can always manage the transition yourself and at your own pace.)

Chevey1 wrote: »

Q2) What fund would you invest in if you were me, (I will not hold your advice against you)

LifeStrategy. 80% if you feel (or need to be) aggressive and depending on how long before you plan to draw it. Perhaps 60% otherwise.

Chevey1 wrote: »

Q3) I'm going to choose the platform Interactive Investor as Vanguard platform does not support a SIPP. Is this a good idea?

Yes. You might also consider iWeb (Halifax sharedealing). For you, even Vanguard themselves would (if they offered a SIPP) be more expensive, 0.15% of your current pension is £250/year. And of course, unlike a flat fee that percentage-based expense would rise as your fund grows.

Marcuspd

Just a quick update on this. I've been sent a letter telling me Virgin lowered the fee from 1.0% to 0.6% on the 25th January 2019.

It might be enough to make me stay. I'll keep an eye on performance.