Old employer pension - how to move?

short_butt_sweet

yes, 0.39% is good for the total cost of a pension.

however, 0.08% is a very small difference, so it would be perfectly valid to move to cavendish+VLS if you very much prefer VLS. (though note that VLS will have to beat your aviva fund by more than 0.25% to put you quids in, because fund performance figures don't include platform charges.)

dunstonh

There is very little cost difference in the funds here. The pension fund will include Transaction charges. So, it is only fair to include them on the UT to ensure like for like. So, that makes VLS 0.22% plus around 0.07% (depending on version) at 0.29%. Plus, you have the platform charge to add on top. Whereas Aviva is total cost.

bowlhead99

pioruns wrote: »

Hi all,
I just have confirmation from Aviva. Annual Management Charge of 0.39% is only fee I am paying there.
So looks like, iWeb would be too expensive at this moment.
Is there any other platform I could consider? Or I am stuck with Aviva?

You're not "stuck with Aviva" because you could consider all the pension providers under the sun. However, if your main motivator to move is cost, and:

If IWeb's fixed charges, plus Vanguard LS fund is going to cost you 0.4%+ in total

And other percentage-based-fee SIPP platforms at 0.25%+, plus Vanguard LS fund is going to cost you 0.4%+ in total

And your existing provider is going to cost no more than 0.4% all in...

Then really there's not a lot of point looking to use the Vanguard LS solution unless the reason you were hoping to use it was something other than cost, such as them offering an asset allocation you can't get with your current provider.

I would need to look at their range of funds to find something similar to V LS or FTSE All-World index , that's where I want to be invested

You said earlier that you feel the V LS 100% equity fund's allocation was complementary to your strategy because it has a higher UK bias (4-5x higher than an All-World index) which is what you want.

So, there is no point seeking out an Aviva fund offering the All-World index, because you will only have a fifth to a quarter of the desired UK allocation.

Either your desired allocation is important to you or it isn't. If you want to buy an all-in-one fund off the shelf, then it should have an allocation you like. The cost difference is secondary. If instead of taking something off the shelf as an all in one product that meets your needs, you're happy to construct it out of specialist components to your own model (eg a UK equity fund and an ex-UK equity fund, or a UK fund and Europe fund and US fund and Japan and Pacific ex Japan and Emerging etc), then look for those specialist funds at Aviva.

, but Aviva have only their own brands available there.

I'm not familiar with the exact product you have but you'll probably find that although they are all prefixed 'Aviva Pension', some of the funds available are based on indexes or run by third party managers - e.g. "Aviva Pension BlackRock 50:50 Global Equity Index Tracker". Typically with personal pension products if you're on an all-in price structure there may be a premium cost to access third party funds, but not for all of them - often trackers have no premium charge.

If you are already on a 'lifestyling' product such as 'my future lifetime' solution which starts off in the Growth fund and moves towards the Consolidation fund over time when you get into the last 10-15 years before your declared retirement age, you may need to leave that scheme to access the broader range of options that Aviva offer, but there won't necessarily be a cost impact to do that. Someone else may chip in here as I'm not an Aviva customer.

[Deleted User]

Thank you all for your replies!
bowlhead, as always you have dismantled my post to smallest pieces

My main motivator was to find out what kind of platform I have, it's fees, and then look around to find better platform, with lower costs, with funds I want available. So basically platform with V LS fund available, worst case scenario FTSE All-World would also work (I have some of that already on ISA, but I can accept more of that If I can't get V LS).
As we now find out, I have one of the best platforms available to me at this moment cost-wise. That's why I said I might be "stuck" with them - as why would I left them, if they are really good comparing to other platforms? So, to not let the tail wag the dog, I might just stay on Aviva, as this is the best platform suitable, and I can find the Aviva fund which would invest into markets I wanted.

bowlhead, yes, I am in investment plan called My Future. It invests everything into Aviva My Future Growth, and closer towards retirement age it sells that and put everything gradually into Aviva My Future Consolidation.
If I decide to stay on Aviva, I will opt out of that program and I will have to find out which one of the funds available is most close to V LS (or FTSE All-World, if there is nothing even close to V LS). I don't want any bonds, I have time.

This is list of funds available to me on Aviva platform:

Fund name Unit prices
Av Balanced Index Fund of Funds (0.39% Annual Management Charge) 336.900
Av BlackRock (40:60) Global Equity Index (Aquila C) (0.39% Annual Management Charge) 347.200
Av BlackRock (50:50) Global Equity Index (Aquila C) (0.39% Annual Management Charge) 467.800
Av BlackRock (60:40) Global Equity Index Tracker FP (0.39% Annual Management Charge) 481.700
Av BlackRock Consensus (Aquila C) (0.39% Annual Management Charge) 303.800
Av BlackRock European Equity Index (Aquila C) (0.39% Annual Management Charge) 342.000
Av BlackRock Institutional Sterling Liquidity (0.39% Annual Management Charge) 106.100
Av BlackRock Japanese Equity Index (Aquila C) (0.39% Annual Management Charge) 193.900
Av BlackRock Over 15 Year Corporate Bond Index (Aquila C) (0.39% Annual Management Charge) 304.800
Av BlackRock Over 15 Year Gilt Index (Aquila C) (0.39% Annual Management Charge) 289.300
Av BlackRock Over 5 Year Index-Linked Gilt Index (Aquila C) (0.39% Annual Management Charge) 333.600
Av BlackRock Overseas Bond Index (Aquila C) (0.39% Annual Management Charge) 131.600
Av BlackRock Pacific Rim Equity Index (Aquila C) (0.39% Annual Management Charge) 335.500
Av BlackRock UK Equity Index (Aquila C) (0.39% Annual Management Charge) 417.700
Av BlackRock US Equity Index (Aquila C) (0.39% Annual Management Charge) 422.400
Av BlackRock World (Ex-UK) Equity Index (Aquila C) (0.39% Annual Management Charge) 445.700
Av Cash (0.39% Annual Management Charge) 167.300
Av Cautious Index Fund of Funds (0.39% Annual Management Charge) 279.900
Av Cautious Managed (0.39% Annual Management Charge) 190.700
Av European (0.39% Annual Management Charge) 336.900
Av Fixed Interest (0.39% Annual Management Charge) 321.800
Av Global Equity (0.39% Annual Management Charge) 384.500
Av Index Linked (0.39% Annual Management Charge) 383.100
Av Managed (0.39% Annual Management Charge) 249.100
Av Multi-Asset Growth Fund FP (0.39% Annual Management Charge) 286.000
Av My Future Annuity (0.39% Annual Management Charge) 139.500
Av My Future Cash Lump Sum (0.39% Annual Management Charge) 106.200
Av My Future Consolidation (0.39% Annual Management Charge) 136.600
Av My Future Drawdown (0.39% Annual Management Charge) 126.900
Av My Future Growth (0.39% Annual Management Charge) 177.600
Av Newton Global Dynamic Bond (0.73% Annual Management Charge) 103.800
Av North American (0.39% Annual Management Charge) 336.200
Av Pacific Basin (0.39% Annual Management Charge) 367.800
Av Pre-retirement Fixed Interest (0.39% Annual Management Charge) 335.400
Av Property (0.39% Annual Management Charge) 380.100
Av Stewardship (0.39% Annual Management Charge) 300.900
Av Stewardship Income (0.39% Annual Management Charge) 280.200
Av Stewardship International (0.39% Annual Management Charge) 276.600
Av Stewardship Managed (0.39% Annual Management Charge) 334.200
Av UK Equity (0.39% Annual Management Charge) 241.800
Av UK Smaller Companies (0.39% Annual Management Charge) 545.500

I will try to check all of them and see what they have under the hood, maybe one of them will be suitable.

And last question: I've never had a SIPP before, where I would send contributions myself, not through my employer. Do I have instant tax advantage when depositing into SIPP? If I deposit 1000, I do get 1000 on my account to be invested, or more? Or I have tax advantages at the end, when I drawdown from it?

[Deleted User]

foofi22 wrote: »

Just make sure the tail isn't wagging the dog.

That is to say you should select what you want to invest in, then find the most cost effective route of holding that investment(s)

In your case, it costs 0.47% to hold a VLS* in a SIPP Cavendish*. Is the extra 0.08% a year really such a burden. Remember if VLS (or whatever) returns "beat" the Aviva fund returns you are quids in.

* not suggesting either but you have mention VLS a few times

Yes, I agree with you completely.
I will find out which Aviva fund is suitable to hold my chosen investments, at 0.39%. If I can't find anything suitable in Aviva, I will transfer money to mentioned SIPP Cavendish and invest into VLS there.

bowlhead99

pioruns wrote: »

I will have to find out which one of the funds available is most close to V LS (or FTSE All-World, if there is nothing even close to V LS). I don't want any bonds, I have time.

This is list of funds available to me on Aviva platform:
I will try to check all of them and see what they have under the hood, maybe one of them will be suitable.

At a glance, if you put a portion into the BlackRock UK Equity Index and another larger portion into the BlackRock World (Ex-UK) Equity Index, you will have achieved your goal of spreading your money into global equities using indexes at a cost of 0.39%. From time to time, as the UK index underperformed or outperformed the World ex-UK index, you could rebalance back to your target percentage for UK listed companies. If you were happy with a 40:60 split of UK to World ex-UK, you could simply use the BlackRock (40:60) Global Equity Index and they would keep it balanced in that ratio for you.

Note the 'World' index used in those products is 'developed world' and doesn't include emerging markets. There will be other products on the list that try to give you a balance between asset classes and will include emerging markets, but they will typically also include bonds which you don't want.

Really, if you are going to set up a new SIPP for yourself with some other provider for your new money, and it's only your existing pension money which will stay with Aviva, it doesn't really matter that you are missing emerging markets as you can always just add a dedicated EM fund on your new platform.

And last question: I've never had a SIPP before, where I would send contributions myself, not through my employer. Do I have instant tax advantage when depositing into SIPP? If I deposit 1000, I do get 1000 on my account to be invested, or more? Or I have tax advantages at the end, when I drawdown from it?

When you put 1000 into SIPP as a personal contribution (or into your Aviva product as a personal contribution) the pension provider will gross it up for basic rate tax (a 25% uplift to £1250) so that you have £1250 of pension assets for your £1000 contribution: you only paid 80% net to get the £1250 gross.

If you are a higher rate taxpayer you would then tell HMRC about this when you do this year's tax return - so for example if you are a 40% taxpayer the £1250 gross amount in your pension should have only cost you £750 net, but you paid £1000 in, so you'll be owed £250 back direct from HMRC.

When you draw down from the pension 'at the end', you will get to take 25% as a tax free lump sum, and the other 75% will be taxed at your marginal rate of income tax that year - which if you have no other income that year would be 0% up to the personal allowance, then basic rate, then higher rate etc depending how much income you were trying to take at that time.

[Deleted User]

Thank you all for your replies.
I've browsed around on Aviva platform, and decision is settled! I've switched to BlackRock (40:60) Global Equity Index Tracker, which keeps 40% of equity in UK companies, and 60% of equity in overseas companies. Thanks bowlhead99 for suggesting this.

Once funds are switched and everything is updated, I will give them a call to see if I can set monthly contribution or do lump sums, as is seems is not available on online platform at this moment.


Once again, thank you all for your opinions and comments!:T:beer:

[Deleted User]

Another day, another surprise. Aviva might be not as good as it seems, if I understand things correctly. Charges listed there at 0.39% are AMC, not OFC! I just realized that there is difference between them. AMC does not include all incurred charges over the period of time compared to OFC, correct?

I will have to ask Aviva for clarification, but 0.39% AMC, how much OFC could that mean?

Albermarle

Charges listed there at 0.39% are AMC, not OFC! I

For some personal /workplace pensions there is only one charge that covers the pension and the funds together .
For other pensions ( and all SIPP's) there are separate charges .
This also confused me when I started to look at some of my old ex employer pensions in more details ,a s they all charged in a different way
The only solution is to call Aviva and get clarification once and for all .

[Deleted User]

Last time I asked them about charges and fees, that's what they replied:

Plan Information

Dear Mr
Thank you for your recent enquiry.
Other than the Annual Management Charge, there are no other charges that we would apply tothis plan. In certain circumstances we may apply an MVR to the members With Profits holdings.
I hope that this information is useful. If you need any more information or have further questions,please contact us and we will be happy to help. So that we can deal with your queries quickly andefficiently, please quote the reference shown at the top of this letter.
If you change your email or postal address, landline or mobile number, please let us know so thatwe can update our records to keep in contact with you.
Yours sincerely,
The Aviva Customer Team

However, this could have been wrongly asked question, and they might have hidden something in plain sight, unless I ask for it. For example I could ask them now, what is my OFC equivalent charge, not AMC charge?