SIPP charges increased - are exit fees waived???

clivep

I know that some contracts such as telephone/mobile ones can be terminated free of charge within a certain period where an above inflation increase is classed as a material detriment.

Does anyone know if this applies to exit fees being waived when an above inflation price increase is announced?

I took out my X-O Liberty SIPP in January 2015 when it was a low-cost option offering "A fixed dealing fee of £5.95 per trade applies, along with an annual administration fee of £95 plus VAT. No fees apply for set-up, transfers or drawdown".

Almost immediately they increased the annual fee to £120, introduced a £25 UFPLS fee, a £100 cash transfer out fee and a £50 in-specie transfer out fee.

They have now announced new charges for April of:
SIPP annual fee up from £120 to £145 (more than 20% increase) and UFPLS payment x 1 up from £25 to £100 (300% increase!!!).

So in just over 3 years the annual management charge will have risen by over 50%. The t's & c's state that they can "reasonably increase the fees from time to time by giving you not less than one month’s notice". 50% over 3 years is way more than inflation and in my view should be classed as a material detriment and their exit fees should be waived.

When Selftrade transferred their portfolio to Equiniti then the change to t's & c's meant that I had a fee free Isa tranfer to IWeb.

Are there any rules regarding waiving the exit fee in such cases?

Has anyone had their exit fees on their SIPP waived in these circumstances?

Brynsam

Have you put your concerns to them? If not, do so - if necessary by means of a formal complaint, which will mean they must handle it within strict time limits and you have a right to go to the Financial Ombudsman once you have their 'final reply' (assuming you don't like what they say).

clivep

Thanks, I've asked Liberty, X-O and Gaudi (X-O's new SIPP provider) for more details about transfer charges and I have another thread about this.

My question here, really, is whether or not the FSA/Pension Regulator/anyone else has made any statement on waiving of fees in these circumstances in the way that Ofcom has for the Telecoms industry.

Alternatively, has anyone had an experience with any SIPP provider regarding whether of not exit fees were waived.

trevman

I can't see their new fee schedule but for 16/17 it states;

SIPP FEES
Annual fee £99 plus vat !!!8211; Jarvis will refund these fees until such time as the X-O share dealing account linked to your SIPP is closed

Fees for following years;
As at April 2015 = x-o.co.uk/wp-content/XOSIPP%20FEE%20Schedule.pdf
As at April 2016 = x-o.co.uk/wp-content/uploads/JARV3168%20X-O%20SIPP%20Fee%20Schedule%20AW.pdf
As at April 2017 = x-o.co.uk/wp-content/uploads/JARV3192%20X-O%20SIPP%20Fee%20Schedule%20AW.pdf

Do you have a link to the new fees as it may also have the same clause?

dunstonh

They have now announced new charges for April of:
SIPP annual fee up from £120 to £145 (more than 20% increase) and UFPLS payment x 1 up from £25 to £100 (300% increase!!!).

The increases seem reasonable when you realise what they are trying to do.

My question here, really, is whether or not the FSA/Pension Regulator/anyone else has made any statement on waiving of fees in these circumstances in the way that Ofcom has for the Telecoms industry.

The food standards agency has no say on financial services. The FCA, on the other hand, does. Generally, when terms are changed on a significant level, you are normally given a limited window to exit the contract at the original costs rather than the new costs.

Whether an increase from £120 to £145 or £25 to £100 is significant is hard to say. You focus on percentage but it's the monetary amount that matters. Its a judgement call I wouldnt want to make but if you want to test it then you need to complain.

If the cost to exit hasn't changed then there is nothing to complain about. You accept it or you transfer out.

EdSwippet

clivep wrote: »

Alternatively, has anyone had an experience with any SIPP provider regarding whether of not exit fees were waived.

Quite a few people -- including me -- moved away from YouInvest when they hiked charges considerably in 2013, and all had to pay the exit fees. Youinvest did the same thing again in 2016, also with no exit fee waiver. There has been no redress from the FOS, at least so far.

More in these threads:
https://forums.moneysavingexpert.com/discussion/5507672
https://forums.moneysavingexpert.com/discussion/4833396

clivep

dunstonh wrote: »

The food standards agency has no say on financial services. The FCA, on the other hand, does.

Quite correct. I must be living in the past... I remembered it as the Financial Services Authority (FSA).

dunstonh wrote: »

If the cost to exit hasn't changed then there is nothing to complain about. You accept it or you transfer out.

Depends on the meaning of their new charges... it could go from £150 to £1,100 if their new in-specie charge is £50 per line of stock rather than in total. Another member has just posted that he has been told by Liberty that it is a single £50 in-specie transfer fee.

EdSwippet wrote: »

Quite a few people -- including me -- moved away from YouInvest when they hiked charges considerably in 2013, and all had to pay the exit fees. Youinvest did the same thing again in 2016, also with no exit fee waiver. There has been no redress from the FOS, at least so far.

More in these threads:
https://forums.moneysavingexpert.com/discussion/5507672
https://forums.moneysavingexpert.com/discussion/4833396

Thanks for the info, doesn't look too promising then.

SIPPer

As someone who is responsible for setting SIPP charges for another SIPP provider that has had to increase charges on occasion, and where an exit fee is applied, our position is that legislation typically does require a period of waived exit fees when charges are increased. It's not financial services regulation though. It's broader legislation covering consumer contracts, from what I can recall without digging through my notes.


The question is whether the increase is a material change to the terms of your contract or not. Our view is that, unless you are told at the time of signing that charges will increase (e.g. in line with price inflation, average earnings, or even a fixed specified rate) then any increases do form a material change, because the customer could not make an informed decision when signing the contract.


As a result we always waive the exit fee for a limited period to allow customers who want to leave us, as a result of the increases in charges, to do so without exit fees. (The period is quite lengthy so that customers have time to get financial advice, shop around, and consider their position.) Our exit fees are only ever design to cover exit costs, which we still incur, but if we increase our charges in a way that the customer could not have predicted when they signed the contract, we believe there is, rightly, an obligation to allow them to leave for free.


Our approach is what I would describe as the industry norm.


Separately to this, we always explain to customers why it is we have had to increase our charges to something other than what they signed up to. We also look to spell out exactly what we are doing for any new charges. Our customers tell us that this is what they expect under the circumstances. Our experience, interestingly enough, is that if you act in line with the above, customers don't leave you in response to the charging increase; we presume because this is that they understand our actions, and approve of the way we've carried them out, even if they don't like the impact of them.

cloud_dog

trevman wrote: »

SIPP FEES
Annual fee £99 plus vat !!!8211; Jarvis will refund these fees until such time as the X-O share dealing account linked to your SIPP is closed

I believe under the new charging structure X-O will reimburse the SIPP fees for the first year, there onwards no reimbursement of SIPP fees.

clivep

I ended up transferring from the X-O Liberty SIPP to the X-O Jarvis SIPP before the new X-O Jarvis SIPP terms changed.


I successfully managed to get Liberty to waive their exit fees and X-O to waive their in-specie transfer fees.


The transfer-in fee and 1st years management charges were refunded although this was quite some time after the transfer took place.


Apparently the new X-O Jarvis charging structure only applies to new SIPPs taken out after their introduction. I have not been notified of any changes as I'll continue to have the annual management charges refunded.