Low cost simple pension needed

fruitbat_2

Hi everyone, 
I’m wondering whether I should transfer my stakeholder pension to a SIPP for lower costs - currently have a stakeholder with c.70k in to which I dribble in a small monthly contribution, but last year my provider gave me an actual figure for their fee and it was higher than expected - it’s eating up most of my contribution. It’s a 1% fee that gets reduced to 0.81% somehow. 
I have looked at comparefundplatforms.com and a couple of providers eg Fidelity with their 0.35% charge, making them look cheaper, but I’m unclear as to how that is made up because all the funds on their website have different ongoing charges (0.11 to 1.11% for the Select 50 for example) 
Given that this isn’t my main pension (I live outside the UK) I’d just like to chuck it in a couple of funds - tracker, or balanced funds, and check it every year or two, but not get seen off for charges. I don’t want to transfer the pension to my country of residence, and please be assured I do take a more active interest in my investments here, I’m just a bit out of touch with the UK scene! 
Can anyone help me understand how the net annual costs of as low as 0.25% are arrived at, and whether this is a good idea in general. 

Thanks in advance. 

bigadaj

You need to look at fixed fee providers once your pension gets to a reasonable level, iweb being one example. They will charge a low fee but also trade fees so if you invest monthly this will add up, iweb for example are £180 per year and then around £10-£12 per trade. You will have to pay the fund charges on top of this, which could be sub 0.1-0.2% for passive trackers or multi asset funds. 
Generally a god idea to reduce platform costs, fund costs are matters of opinions, some ar happy to pay the absolute minimum for trackers some perceive added value in some markets for active funds which cost more.
Just realised you say you live outside the uk, dependent on your tax domicile that may limit the platforms available to you.

Mistermeaner

Vanguard and iWeb offer simple low cost SIPPs and both offer the vanguard life strategy funds which are low cost “one size fits all” funds 
this is not the only way nor a recommendation but these are some of the popular and oft cited suggestions on this site
depending on your age you may want to make Sure provider offers draw down - vanguard don’t at the moment 

Albermarle

Normally there two elements for the charges . The 'platform charge' for administering the pension , buying and selling funds, taking in and sending out money, sorting taxes etc . Then there is charge for the actual investments you hold.
There are some pensions and I think your stakeholder is one, where there is just one charge to cover both ( and then a discount)
So to use your example of Fidelity , their platform charge is 0.35% and then there will be a charge for the investments you hold. 
For the size of your fund 0.1/0.2% difference is not going to make much difference compared to how your investments actually perform. Picking the right type of investment(s) for your situation is more of a priority than charges , as long as they are not excessive. 

dunstonh

but last year my provider gave me an actual figure for their fee and it was higher than expected - it’s eating up most of my contribution. It’s a 1% fee that gets reduced to 0.81% somehow. 

Stakeholder pensions make no charges against what you pay in.   They charge against the value (as will SIPPs).

There can come a point if your contribution is small that the fund has grown enough that the charges can exceed your contributions.   However, that is not the way to look at it.

I have looked at comparefundplatforms.com and a couple of providers eg Fidelity with their 0.35% charge, making them look cheaper, but I’m unclear as to how that is made up because all the funds on their website have different ongoing charges (0.11 to 1.11% for the Select 50 for example) 

A stakeholder pension is a mono charged plan.  It only has the annual management charge and that's it.  A  SIPP is a multi-charge contract.   You have the charge for the SIPP provider. You also have the investment charges and there may be a (potentially large) menu of charges for various tasks depending on the SIPP provider.

Stakeholder pensions are generally a niche option nowadays and you can get cheaper than 0.81%   

fruitbat_2

Thanks to all those who have replied so far. Looks like Vanguard is out as it’s for UK residents only, unless I could squeak in under the 5-year rule as we’re currently 4.5 years overseas? If anyone has tried this and succeed I would be interested to hear from you. 
Other ‘packaged’ pensions I’ve  found that seem to meet the low cost low hassle approach are Nutmeg and PensionBee with about 0.5% charge. Cute names, any fans out there in MSE world? 

[Deleted User]

fruitbat_2 said:

Thanks to all those who have replied so far. Looks like Vanguard is out as it’s for UK residents only, unless I could squeak in under the 5-year rule as we’re currently 4.5 years overseas? If anyone has tried this and succeed I would be interested to hear from you. 
Other ‘packaged’ pensions I’ve  found that seem to meet the low cost low hassle approach are Nutmeg and PensionBee with about 0.5% charge. Cute names, any fans out there in MSE world? 

If you could choose Vanguard (which I doubt you can) you won't be able to trade, you are only allowed to keep money in for admin purposes (they have weird T&Cs for people who move abroad and become non UK Tax Resident)
I don't know of any that will allow you to set up without being a UK Tax Resident , I for one would hastily contact a UK IFA if you want to go further (based on the six months to go), they might be able to get you onto a very low cost IFA type platform (but you will be charged their fee) 
(see post below)
Somebody might mention QROPS - I am not a fan and I think they are too costly and the market is full of sharks 

[Deleted User]

In addition to the above - done some digging, looks like AJ Bell might be for you
https://www.youinvest.co.uk/faq/am-i-eligible-sipp