IWeb Sipp Drawdown Charges: 1.1% pa. Is this correct?

ffacoffipawb

dunstonh said:

I should add, I have a small SIPP with Hargreaves Lansdown wholly invested in cash which I am taking a PCLS from and moving 3 times this into drawdown but taking no income at this stage.

There are no charges as it is just uninvested cash.

The drawdown illustration shows a charge impact on the fund of charges of 0.70%. Makes no sense to me.

The figures use assumptions as you have not selected your investment funds yet.

If they assume cash, the current holding, it seems inconsistent to use charges relating to an unknown hypothetical scenario.

Once in drawdown it will be invested, not sure what in, probably Rathbone Global Opps or Blue Whale, but they dont know that.

Same scenario for the OP as well I suspect.

EdSwippet

_pete_ said:

Yes, I'm wondering the same - I guess they use standard figures for projected low/medium/high growth, so perhaps they use a standard fund charge figure too, for comparision purposes.

I'm pretty sure all pension providers use standard (and useless) figures for projections. If I recall correctly, some regulation or another mandates them to do so. I always completely ignore mine.

_pete_ said:

I've also realised that they charge a 0.5% transaction charge per fund deal, which amounts to £450 when I sell £75k worth of fund so I can draw it down in cash.

This 0.5% transaction charge is a pure guess on their part, probably based on UK stamp duty. If you're holding funds/OEICs or ETFs then you don't pay it. Just the £5/trade. That's it.

ffacoffipawb

EdSwippet said:

_pete_ said:

Yes, I'm wondering the same - I guess they use standard figures for projected low/medium/high growth, so perhaps they use a standard fund charge figure too, for comparision purposes.

I'm pretty sure all pension providers use standard (and useless) figures for projections. If I recall correctly, some regulation or another mandates them to do so. I always completely ignore mine.

_pete_ said:

I've also realised that they charge a 0.5% transaction charge per fund deal, which amounts to £450 when I sell £75k worth of fund so I can draw it down in cash.

This 0.5% transaction charge is a pure guess on their part, probably based on UK stamp duty. If you're holding funds/OEICs or ETFs then you don't pay it. Just the £5/trade. That's it.

There is no stamp duty on share sales either, only on purchases.

eskbanker

_pete_ said:

I wonder if they are assuming a generic fund charge of 1% regardless of your actual investments as I cannot see any other charges that I have missed.

Yes, I'm wondering the same - I guess they use standard figures for projected low/medium/high growth, so perhaps they use a standard fund charge figure too, for comparision purposes.

I've also realised that they charge a 0.5% transaction charge per fund deal, which amounts to £450 when I sell £75k worth of fund so I can draw it down in cash.

If you're taking the 0.5% from the fund charges section at https://www.iweb-sharedealing.co.uk/PDFs/CostsAndCharges.pdf then this has caused confusion on here before (not least because it's coincidentally the same figure as stamp duty on share purchases) - it doesn't relate to an actual cost you pay when buying or selling fund units but is instead an estimate of a typical cost incurred by the fund manager when buying and selling the underlying investments within the funds.

https://www.vanguardinvestor.co.uk/content/documents/legal/vanguard-full-fund-costs-and-charges.pdf clarifies that for VLS60, these are actually 0.05%, so an order of magnitude below IWeb's 'typical' figure....

_pete_

EdSwippet said:

This 0.5% transaction charge is a pure guess on their part, probably based on UK stamp duty. If you're holding funds/OEICs or ETFs then you don't pay it. Just the £5/trade. That's it.

Thank you.  I hadn't even spotted the stamp duty dealing charge (something else to worry about!) - I was referring to the 0.5% transaction cost mentioned in their Fund Charges section.

eskbanker said:

If you're taking the 0.5% from the fund charges section at https://www.iweb-sharedealing.co.uk/PDFs/CostsAndCharges.pdf then this has caused confusion on here before (not least because it's coincidentally the same figure as stamp duty on share purchases) - it doesn't relate to an actual cost you pay when buying or selling fund units but is instead an estimate of a typical cost incurred by the fund manager when buying and selling the underlying investments within the funds.

https://www.vanguardinvestor.co.uk/content/documents/legal/vanguard-full-fund-costs-and-charges.pdf clarifies that for VLS60, these are actually 0.05%, so an order of magnitude below IWeb's 'typical' figure....

Ah! Thank you.  Hopefully IWeb will confirm this.  Ironic that I'm paying them to answer these questions when quicker, clearer and better informed answers are available for free from the clued-up people on this forum.

bowlhead99

_pete_ said:
Hopefully IWeb will confirm this.  Ironic that I'm paying them to answer these questions when quicker, clearer and better informed answers are available for free from the clued-up people on this forum.

Well, you're not paying them very much to answer the questions as you presumably picked them on cost grounds.  Pay peanuts, get monkeys. Whereas on MSE forums you can get feedback from hundreds of monkeys for free, and some of them will be competent  

ffacoffipawb

bowlhead99 said:

_pete_ said:
Hopefully IWeb will confirm this.  Ironic that I'm paying them to answer these questions when quicker, clearer and better informed answers are available for free from the clued-up people on this forum.

Well, you're not paying them very much to answer the questions as you presumably picked them on cost grounds.  Pay peanuts, get monkeys. Whereas on MSE forums you can get feedback from hundreds of monkeys for free, and some of them will be competent  

The infinite monkeys theorem.

_pete_

bowlhead99 said:

_pete_ said:
Hopefully IWeb will confirm this.  Ironic that I'm paying them to answer these questions when quicker, clearer and better informed answers are available for free from the clued-up people on this forum.

Well, you're not paying them very much to answer the questions as you presumably picked them on cost grounds.  Pay peanuts, get monkeys. Whereas on MSE forums you can get feedback from hundreds of monkeys for free, and some of them will be competent  

Love this!! 

talexuser

get enough monkeys with enough typewriters and.....

eskbanker

talexuser said:

get enough monkeys with enough typewriters and.....

Just visualising the number of people reading this on their phones and thinking 'what's a typewriter?'!