Financial advice for pensions/savings

FelidaeUK66

Hi there!

Firstly, sorry, this is a little lengthy but looking for some advice if poss please as I’m not savvy with ins/outs of financial info. I save, contribute to a pension but anything other than that, it’s not something I manage well and a little over the head! (I'm not sure if this needs to go into the Savings forum too.)

So following a call with Pension Wise, it was suggested to contact an IFA and we have had discussions with two financial advisors who have given their fees as follows:

1st. Initial consultation £150; looking at pensions and producing a pension report £395 plus £50 per pension (I have 3) + VAT, so around £834. (For any other financial planning this will be fee based. )

2nd. Initial consultation – free. Looking at pensions and producing a pension report £650 inc VAT. (For financial planning thereafter, 0.55% ongoing, yearly charge.)

Does anyone have any thoughts about these costs? Seem expensive or reasonable?

We basically feel we need some advice for the following reasons:

• Me: I am 52 and have an i) old, frozen, Scottish Widows Private Pension (unitised with Profit), ii) a fairly recent Royal London company pension (profit share account) and finally iii) a current People’s Pension. I am only paying into the latter pension at the standard 4% with my employer paying 3% and the provider the last 1% for the total 8%. My salary is £30k plus.

• My husband: 55 and has just one pension, a company scheme which he has been paying into for the last three years, contributing 10% and company 8%. Because he’s been in the UK only since 2012 he will not be able to achieve full state pension at 67. His salary is less than £30k.

Our question to the two advisers were therefore:

• We have savings of £30k which are in fixed term deposit accounts of 2% and 1.8%, and with additional monies of £10k waiting to be put somewhere.

• We are regular savers so with any future savings – should we :-
a) Continue to put monies into ISAs?
b) Increase the amount either myself or my husband pay into our current workplace/company pension, or even my previous Royal London pension (and yes, they do allow further contributions)?
c) Buy more NI contributions for my husband?
d) Do something else with the savings?

• We don’t have a mortgage but unfortunately pay private rent. We don’t have any debts.
• I would like to achieve a minimum income of £20k when I retire at 67 especially as my husband won't be receiving much. How can I do this?

Are the above queries worth the cost of a financial advisor or, with research and possible help from forums like this, it’s something we (I) could manage ourselves?

Any thoughts gratefully appreciated and many thanks in advance.

JoeCrystal

FelidaeUK66 wrote: »

1st. Initial consultation £150; looking at pensions and producing a pension report £395 plus £50 per pension (I have 3) + VAT, so around £834. (For any other financial planning this will be fee based. )

2nd. Initial consultation – free. Looking at pensions and producing a pension report £650 inc VAT. (For financial planning thereafter, 0.55% ongoing, yearly charge.).

First of all, how large is the pension pots altogether? If you are willing to transfer them into a new pension scheme, it may be possible to have the fees deducted from the pension pot thus saving the VAT?

FelidaeUK66

Hi Joe,

Current value of my pensions amounts to about £50k..

The adviser we saw yesterday mentioned that it probably wouldn't be worth, or even possible, to put the pensions together, but that's something he would look into. How would one 'have the fees deducted'.. who would do this, is it something you'd have to request or would IFA do it automatically?

lisyloo

You may not want to transfer the pensions if either

They have very bad penalties (one of mine has deduction of around 30%)
They have some good guarantees/benefits
They have very low fees

So you cannot rely on this method as it might turn out that you don’t want to transfer the pensions.

As a rough ball park £50k will provide £2k per annum using 4% as the drawdown rate.
People can argue until the cows come home about whether that’s too high or too low but gives you a very rough ball park.

menziesthefish

1st. Initial consultation £150;

Any respectable financial adviser will offer the initial meeting without charge or obligation. I certainly wouldn't pay for it as the meeting is as much about them understanding whether or not they can help you, as it is you feeling happy that you like what they have to say and are willing to trust them with your money.

2nd. Initial consultation – free. Looking at pensions and producing a pension report £650 inc VAT. (For financial planning thereafter, 0.55% ongoing, yearly charge.)

This sounds pretty reasonable. The value you get from the fixed cost of the pension report will depend on what it shows, so make sure you understand exactly what you will get. There's a chance that VAT would not be applicable depending on what their advice is, so it would be worth checking this when you meet them too.

0.55% for an ongoing planning service sounds like good value, though again, make sure you know what you will get for this - i.e. 24/7 access to their expertise or just an annual 1 hour meeting.

menziesthefish

Are the above queries worth the cost of a financial advisor or, with research and possible help from forums like this, it’s something we (I) could manage ourselves?

They are almost certainly questions that you could answers yourself, but you would need the technical knowledge, the time, and the inclination to work out the wide range of permutations yourself.

I have no doubt you could get some great help and guidance from people on this forum, but you shouldn't expect to get tailored advice as it is impossible to answer many of your questions without knowing the full details of your financial affairs, your personal circumstances, your goals, priorities in life, timeframes etc.

Conversely, this is bread and butter work for a good financial adviser. It's what they do. So as long as you see value in paying their fees to have these questions answered then why wouldn't you engage with one. It's a bit like replacing a boiler - you can learn all you need to learn from YouTube and Google if you are so inclined, but there's value and peace of mind in employing an expert because if it goes wrong...

FelidaeUK66

menziesthefish wrote: »

Any respectable financial adviser will offer the initial meeting without charge or obligation. I certainly wouldn't pay for it as the meeting is as much about them understanding whether or not they can help you, as it is you feeling happy that you like what they have to say and are willing to trust them with your money.



This sounds pretty reasonable. The value you get from the fixed cost of the pension report will depend on what it shows, so make sure you understand exactly what you will get. There's a chance that VAT would not be applicable depending on what their advice is, so it would be worth checking this when you meet them too.

0.55% for an ongoing planning service sounds like good value, though again, make sure you know what you will get for this - i.e. 24/7 access to their expertise or just an annual 1 hour meeting.

Yes, I think the IFA we saw last night said that we could have 24/7 access and have more than 1 meeting per year if required - whether that would be £ extra, I'm not sure but on the whole, I feel he's 'better' than the first IFA's quote and I could certainly ask him to confirm his fees in writing before we chose to proceed with him.

FelidaeUK66

menziesthefish wrote: »

They are almost certainly questions that you could answers yourself, but you would need the technical knowledge, the time, and the inclination to work out the wide range of permutations yourself.

I have no doubt you could get some great help and guidance from people on this forum, but you shouldn't expect to get tailored advice as it is impossible to answer many of your questions without knowing the full details of your financial affairs, your personal circumstances, your goals, priorities in life, timeframes etc.

Conversely, this is bread and butter work for a good financial adviser. It's what they do. So as long as you see value in paying their fees to have these questions answered then why wouldn't you engage with one. It's a bit like replacing a boiler - you can learn all you need to learn from YouTube and Google if you are so inclined, but there's value and peace of mind in employing an expert because if it goes wrong...

Absolutely. I don't have the time or knowledge therefore I feel there would be value to use an IFA, especially if we have limited funds that need to be managed as efficiently as possible.

squirrelpie

My husband: 55 and has just one pension, a company scheme which he has been paying into for the last three years, contributing 10% and company 8%. Because he’s been in the UK only since 2012 he will not be able to achieve full state pension at 67. His salary is less than £30k.

Does he have any pensions or other assets elsewhere from the time before 2012?


Has he paid NI for every year since he came to the UK?

Spreadsheetman

What is your SP projection? Will you get the full amount?

How much SP is your husbands projection?

FelidaeUK66

No, he's not got all years - about 4 only I think, so if he works til 67 he'll have 16 years.

No, hubby is from Iraq - he has no pension or any other savings. He has property- a share in a house plus land, but until that country is sorted out, he cannot sell either, so we have to totally take this out of future planning