Should I transfer my SL pension to my SIPP

dunstonh

What is the risk level of your ISAs compared to the pension? (perhaps tell us what the equity/bond/property ratio). My gut feeling is that there will be a risk difference (DIY investors tend to invest higher than default options)

Now when I look at the average rate of 7% growth on my Standard Life account hopefully you can see why I see it as a low average compared to what I can do with it over the next 8 years until 2026 arrives. Compounded over the years it makes a fair difference.

What if the next 8 years is the counter to the last 8?

Then when I look at their hypothetical figures of £40,800 and giving me a return of 2.51% and they keep the £40,800 it doesn!!!8217;t feel like its worth considering leaving it with SL.

It sounds like you still dont understand this. If you used the same assumptions on your SIPP you would get the same outcome.

I can appreciate that 2.51% is their hypothetical rate for the future and could change either way, so could I not argue that my 12% may also change either way.

They are using an artificially low rate to illustrate a worse than likely option. You are using an artificially high rate to illustrate a higher than likely option.

Personally when I saw 7%, I thought well that!!!8217;s not great but when I then saw their illustration of 2.51% and compared that with my families paperwork in recent times which seemed closer to 5% it sort of confirmed to me that I have no choice but to take this money and manage it myself through my SIPP and Drawdown.(I could be making a return of 12% on that £40800 or more if I'm lucky).

You really really need to understand projections. At the moment, you are way off on what they are telling you. You also need to be much more realistic in your investment returns projections.

MK62

dunstonh wrote: »

Although the standalone insurance company based pensions are usually cheaper. Typically around 0.35% to 0.55% nowadays. The workplace scheme cap brought charges down but it sort of acted as a benchmark to hit. Whereas there is no such benchmark on individual plans (technically, the old 2001 RU64 rule still exists but that was a 1% benchmark to make sure stakeholders were considered. So, its long out of date).

I have seen SL workplace schemes at 0.25%-0.35% as well as those at 0.75%. (and of course, all the non-personalised literature, such as fund factsheets, refers to them as 1% despite the real charges being much lower).

What I meant was it's competitive with SIPPs.....maybe should have explained that better.

As an example

SLI European Equity Income Pn S4.......fund charge is 1.87% (TER)....there's then the 0.75% discount, so net charge is 1.12%.
The same fund at HL would cost 0.9% plus a 0.45% platform charge, so 1.35%.
At AJ Bell it'd be 0.9% plus 0.25% platform charge, so 1.15%, but then there are other charges on top of that.
At IWEB it'd cost me 0.9%, plus the % split of the account charge, plus any dealing/withdrawal charges.

....and so on.....

So I feel it's competitive with the other options I could use!
I could probably get it a bit cheaper I know, but then cheapest isn't always best way.

bostonerimus

Your interest rate is 6.1% not 7%. That's perfectly fine and in the range that most people should use for their planning. So does that match up with your expectations and requirements. If it does then you are doing ok.

sandsy

You've had 6.19% over the last 12 years.
No one has any idea what you will get over the next few years, irrespective of whether you leave it with SL or move it.
The projections you get won't be much different anyway as all companies have to use the same principles when sending out projections.
The £40,800 projected figure allows for inflation of 2.5%pa, ie. if it didn't allow for inflation, the figure would be higher by 2.5%pa for each year of the projection.
The 2.51% income sounds like it's based on an RPI linked annuity - ie. a guaranteed income for life that would increase in line with RPI every year and pay out a 50% spouse's benefit, I'm guessing.
There's other ways of taking income so if you wanted a guaranteed income, you could take it another way and if you didn't want a guaranteed income, you could take it a different way.