Embark platform

toffeeb65

aNot sure if I'm giving enough details for any advice here but will add if needed.

Coming up to 55 and whats being offered to be able to take a tax free lump sum is...
flexi access drawdown vis a sipp, embark platform. Product charge £240+vat. adviser service charge 0.75% investment management charge 0.87% , aggregated total recurring charge in year 1 and every year thereafter.

My understanding so far is a sipp is as it says on the tin...make own decisions what investing you choose. well I have no intentions of taking that on as I wouldn;t have a clue and would rather use someone else in the know.

Would anyone say those fees are ok?

Albermarle

For a SIPP in drawdown , then a platform charge of £240 pa is quite competitive ( although without knowing the size of your fund it is difficult to be exact .
Investment fund charges are typically 0.25% to 1.5%
0.75% is pretty typical advisor fee for medium sized fund .
So altogether you are paying quite a lot but as you want/need professional advice then that is why .

A lot of posters on this forum DIY their pensions but of course mistakes can me made if you 'haven't a clue '

toffeeb65

abermarle 475,000 before taking 25% tax free so about 350k going in.

also noticed some will be held in cash with metro bank and interest on that is 0.95% EP will get 2/3rd of that interest...is that the norm?

Albermarle

abermarle 475,000 before taking 25% tax free so about 350k going in.

Question here is why are you taking the 25% tax free sum ?
If there is a specific reason to take it ( such as you need the money for some big purchase) than no problem. If you do not need the money for a specific purpose best to leave it where it is . Although as you have professional advice I guess you already discussed this .

also noticed some will be held in cash with metro bank and interest on that is 0.95% EP will get 2/3rd of that interest...is that the norm?

Many SIPP's pay zero interest, as they are not really designed for cash savings ,more for investments.

toffeeb65

yes need to take 25% to pay pay mortgage and get ready to retire for ill health reasons

thanks for reponse too regarding fees was slightly worried they were way over the top

Malthusian

toffeeb65 wrote: »

My understanding so far is a sipp is as it says on the tin...make own decisions what investing you choose.

Nope. In theory it means it offers the widest possible range of investments. By contrast a non-SI "personal pension" offers a restricted range of funds chosen by the insurer. There is no contradiction between having a SIPP and taking advice on which investments you use.

(I say in theory because SIPP is now largely a marketing label carrying no meaningful information, as so few people use the full flexibility, and many "SIPPs" also have a restricted range of investments. The ultimate example is Vanguard's upcoming "SIPP" which only offers Vanguard's own funds.)

0.87% for investment management is very high. Most people on this forum would prefer using index-tracking funds to achieve much lower fund management costs. But it comes down to whether you are happy to trust the adviser's judgment on this. Apparently they think active management is worth the extra cost.

Embark is moving away from flat fees so you should keep an eye on platform costs.

At the moment the all-in charge of 1.7%pa is high but OK. If Embark raises its platform costs from the current very low 0.08% towards the more normal 0.2% - 0.3% range for the industry, it will start to approach downright expensive. But not "way over the top" (I would define that as the 2 - 2.5%pa charged by the likes of HL and SJP).