Fees on Scottish Widows Consensus Fund

Abbey1991

How does the fees (1% is the only transparent one?) on the Scottish Widows Consensus Fund compare to the fees on a passive fund through a low-cost SIPP?

And if you transfer (not in drawdown), does it transfer as a fund or as a cash value?

And are there any Market Value Reductions to be aware of?

Thank you

bowlhead99

Assuming this is a modern workplace pension, you are unlikely to be paying 1% for it. SW show the pricing of the funds on that standard rate of 1% so they can give one standard factsheet and unit price to all their customers, but your employer would have had some sort of discount rate arranged so that actually you are only paying a (e.g.) 0.7% or 0.65% or 0.5% rate or whatever for their inhouse and tracker funds, and your lower rate will get extra units credited each month as a rebate on the 1% headline management charge figure used for the factsheet. You could give SW a call and double check what you are actually paying. Maybe the pricing is different for an inactive member than for someone actively contributing new money all the time.

A cheap mixed asset tracker-based fund within a SIPP could cost you 0.2-0.3% for the fund and 0.25-0.45% for the SIPP platform service depending where you go. So half a percent all in at the low end. If your pension is large you might find it more efficient to go to somewhere that charges on a fixed fee basis at £x hundred a year rather than having a percentage based fee for the pension administration and platform services, and then it would be even lower as a percentage.

If you did use a 'fixed fee' platform, the fund itself would still be in the 0.2-0.3% range for some cheap mixed asset fund up to 0.8-1% on the higher end for actively managed options, with some blend in the middle if you self selected a range of funds to constructed your own portfolio out of a mix of building blocks.

If you transferred to another provider that wasn't SW, it would have to go as cash, because independent pension platforms don't offer SW pension company versions of funds.

AFAIK there is no 'market value reduction' on a Consensus fund - it has a daily unit price and is not one of them there 'with profits' funds which relies on bonuses credited from time to time and fixed periods for getting your money out without suffering MVR etc.

You could easily clarify the transfer out process and ensure you don't have any protected rights that would be given up by moving away, by calling SW up on the phone. They can email you a valuation and other documentation you might want to see. Generally if it is a fund that is still being paid into, you need to leave at least £2 in the account to keep it alive while you partially transfer your money elsewhere. However if you're no longer contributing and the money is just sitting there growing without you, you can fully transfer it away and put it on someone else's platform instead.

Abbey1991

bowlhead99 wrote: »

Assuming this is a modern workplace pension, you are unlikely to be paying 1% for it. SW show the pricing of the funds on that standard rate of 1% so they can give one standard factsheet and unit price to all their customers, but your employer would have had some sort of discount rate arranged so that actually you are only paying a (e.g.) 0.7% or 0.65% or 0.5% rate or whatever for their inhouse and tracker funds, and your lower rate will get extra units credited each month as a rebate on the 1% headline management charge figure used for the factsheet. You could give SW a call and double check what you are actually paying. Maybe the pricing is different for an inactive member than for someone actively contributing new money all the time.

Thank you!
It's not workplace, it's a personal pension taken out through a MSE-recommended intermediary a few years ago - perhaps Cavendish? I can't remember exactly.

Does that rate of eg 0.7% include both the fund fee and the platform fee?

SonOf

The consensus fund is 1% as default but any new plan taken out after 2013 is unlikely to be on 1%. Most will be on 0.6%-0.75% but some could be lower.

it's a personal pension taken out through a MSE-recommended intermediary a few years ago - perhaps Cavendish? I can't remember exactly.

SW PPPs were good until around 2008. After that, better options existed. So, I guess yours was either a long time ago, in which case 1% is likely or the intemediary was not whole of market (Cavendish are not).