Confused about SIPP charges - platform fee AND funds charges?

Bimbly

Albermarle wrote: »

The 0.4% total charges seem a bit too good to be true. Suggest you call them direct and ask explicitly if these are really the only charges.
I know many large employers have negotiated lower charges for their workplace pensions but not quite this low in my experience.

My employer's scheme does not have a platform charge. Fees comes purely from whatever you're invested in. For the standard investment options, this is 0.21%. If you want to self select funds the basic Blackrock Index trackers are also 0.21%, although there also other options which are more expensive.

So 0.4% seems entirely plausible from my limited experience.

Albermarle

Around eight years ago my (now ex-) employer's group personal pension was charging 0.33%. This dropped to 0.29%, to 0.19% on a change of provider, to now 0.18% in an Aviva (formerly Friends Life) plan.

I just checked my cheapest one again ( very large ex employer ) For a world equity tracker fund the total charge is 0.33% including both fund and platform charge , so yes less than 0.4%.
However the non tracker funds cost in total between 0.6% and 1%..
So I still think 0.4% would be on the low side for a pension, if you were not just invested in simple tracker funds but I could be wrong.

dunstonh

My employer's scheme does not have a platform charge.

Most employer schemes are not run by investment platforms. So, they wouldnt have a platform charge if they are not a platform.

Fees comes purely from whatever you're invested in.

That is the most common method with workplace pensions, personal pensions and stakeholder pensions.

So 0.4% seems entirely plausible from my limited experience.

It is. You are now seeing retail pensions via advisers and workplace pensions come in at 0.2x%. Although 0.3x% is more common.

cfw1994

EdSwippet wrote: »

No harm in the OP checking, but in my experience, in recent years I have not had an employer plan with charges above 0.4%!

Around eight years ago my (now ex-) employer's group personal pension was charging 0.33%. This dropped to 0.29%, to 0.19% on a change of provider, to now 0.18% in an Aviva (formerly Friends Life) plan. I could just about beat this 0.18% by moving to a SIPP, but not by much, and the Aviva platform has some advantages that neither of my two SIPPs have. Honestly, I'm actually pretty happy leaving this particular pension with Aviva.

All the 'default' fund options (about a dozen of them) within the Aviva plan we have are 0.25%....although per my other thread, one of the global ones now claims to be 0% (#Confusing+unbelievable!)
Some of the non-default ones (we have over 80 to chose from) go up to around 1%, but the vasy majority are 0.25-0.33%.

dunstonh wrote: »

Most employer schemes are not run by investment platforms. So, they wouldn't have a platform charge if they are not a platform.

That is the most common method with workplace pensions, personal pensions and stakeholder pensions.

You are now seeing retail pensions via advisers and workplace pensions come in at 0.2x%. Although 0.3x% is more common.

I would suggest that having zero platform charge seems pretty good in terms of lowering the over all costs (per the http://www.kroijer.com recommendation!)

Not quite sure how the charges go at point of retiring, although I get the impression there will remain no 'platform' charge....