Vanguard SIPP Announced

[Deleted User]

Unfortunate the platform isn’t free like in other jurisdictions. Wonder why...

Albermarle

It looks like this Vanguard simple SIPP/personal pension ( they call it both ) will be low cost for small/medium sized pensions invested in funds, say less than £100K .
The £375 max fee equates to a pension of 250K and at this level : Aj Bell: Fidelity and II , will be in a similar ball park . II will be actually cheaper and If you hold mainly shares /ETF's/investment trusts then AJ Bell and Fidelity will also be significantly cheaper than Vanguard and all with a much larger range of investments available .
So like all platform comparisons/choices it will still be horses for courses to a large extent but now with another horse in the line up.

SonOf

Deleted_User wrote: »

Unfortunate the platform isn’t free like in other jurisdictions. Wonder why...

Vanguard chose to pay FNZ to code a new pension product as they didn't want to use a SIPP (which already existed on the FNZ software. Plus, economies of scale will apply.

MiFID II may have a bit to do with it as well by preventing funding from the fund side.

Notepad_Phil

m_c_s wrote: »

I assume drawdown will be free but they are going to announce the process after April 2020.

The page does say The Vanguard Personal Pension will also be competitive for investors who want to enter drawdown over the age of 55, once this option is available in the 2020-21 tax year. Simply put, there will be no additional charges for going into drawdown in the Vanguard Personal Pension. so I would say drawdown will be free.

I presume that cash held in the SIPP will follow Vanguards current practice so this could be an interesting choice:

You'll receive interest at a rate of 0.50%. Please note that:

This is a variable interest rate and can go down as well as up.
We earn 0.70% interest on your cash, but only pass on 0.50% to you. The 0.20% we deduct is to cover our banking costs.
You'll pay an annual account fee of 0.15% on any cash in your account.

Mutton_Geoff

m_c_s wrote: »

I assume drawdown will be free but they are going to announce the process after April 2020.

From the link above .. Simply put, there will be no additional charges for going into drawdown in the Vanguard Personal Pension

Thrugelmir

Notepad_Phil wrote: »

The page does say The Vanguard Personal Pension will also be competitive for investors who want to enter drawdown over the age of 55, once this option is available in the 2020-21 tax year. Simply put, there will be no additional charges for going into drawdown in the Vanguard Personal Pension. so I would say drawdown will be free.

Fee free drawdown would be an expensive open ended commitment. Competitive suggests charges of some kind. "Going into" is rather different to say "withdrawing funds".

Notepad_Phil

Thrugelmir wrote: »

Fee free drawdown would be an expensive open ended commitment. Competitive suggests charges of some kind. "Going into" is rather different to say "withdrawing funds".

Agree that it could be expensive but they do say "It can be difficult for investors to understand exactly what they are paying for with a SIPP, so we wanted our pricing to be as clear as possible. On top of our account fee, you will pay fees for the funds in which you invest within your pension and also fund transaction costs but there are no other fees." so I think its likely to be free to begin with and if it becomes too expensive then they'll jack up the prices. We'll find out soon enough.

shinytop

An inclusive drawdown service is only free if you're using it. Otherwise it's an extra cost for something you don't need.

Fiendarina

Definitely no extra fees for drawdown. The only fees on the Vanguard Sipp are the account fee, fund fees, transaction fees and charges for buying & selling ETFs if you don't want to wait for bulk trades.

[Deleted User]

Fiendarina wrote: »

Definitely no extra fees for drawdown. The only fees on the Vanguard Sipp are the account fee, fund fees, transaction fees and charges for buying & selling ETFs if you don't want to wait for bulk trades.

Their bulk dealing approach is a bit strange. Do they permit limit orders on bulk deals?