Weighing up transferring workplace pension to SIPP

ratechaser

Alexland said:

ratechaser said:

Most of my pension is now with Nutmeg - platform fee is 0.3% for fully managed

How did you get that rate when their normal service charge is 0.75% on the first £100k then 0.35% for the portion above that?

Flat 0.3% - they said it could be done for pots over 500k - not an advertised rate and don't know if they'd have offered it if I hadn't asked them to move first... goes to show that even with this sort of thing there is sometimes leverage - doesn't hurt to ask anyway...

Alexland

ratechaser said:

Flat 0.3% - they said it could be done for pots over 500k - not an advertised rate and don't know if they'd have offered it if I hadn't asked them to move first... goes to show that even with this sort of thing there is sometimes leverage - doesn't hurt to ask anyway...

Interesting but that's still over £1,500 pa which might be worth it over the short term for the Avios but I'd rather pay Fidelity the capped £45 pa plus the occasional £1.50 divi reinvestments for our large SIPPs (or basically nothing as the cashback they gave me covers my account fees for at least a decade). The problem I would forsee with having a large amount on Nutmeg for a few years is the random effects of the time in cash when sold out of the market when transferring in and out of their scheme (and the associated market spread costs on switching in and out of the underlying ETFs).

ratechaser

Alexland said:

ratechaser said:

Flat 0.3% - they said it could be done for pots over 500k - not an advertised rate and don't know if they'd have offered it if I hadn't asked them to move first... goes to show that even with this sort of thing there is sometimes leverage - doesn't hurt to ask anyway...

Interesting but that's still over £1,500 pa which might be worth it over the short term for the Avios but I'd rather pay Fidelity the capped £45 pa plus the occasional £1.50 divi reinvestments for our large SIPPs (or basically nothing as the cashback they gave me covers my account fees for at least a decade). The problem I would forsee with having a large amount on Nutmeg for a few years is the random effects of the time in cash when sold out of the market when transferring in and out of their scheme (and the associated market spread costs on switching in and out of the underlying ETFs).

It was a balance - generally I get 2-3p value per Avios when spending so over 5 years my view was that from a fees perspective I'd be doing as well as I could elsewhere, but with an element of active management added in. Time will tell if it achieves better performance than vanguard, or my occupational scheme...

As far as the random effects of time in cash you
mention, my reasonable assumption is that they 'ought' to be no worse than neutral on aggregate, and hopefully slightly beneficial, assuming the active management model is working well. But again, time will tell.

Prism

BoracicLint said:

Prism said:

If it helps we have done a partial transfer from a Scottish Widows workplace pension into a SIPP. It was done in cash though as the pension funds do not match with the SIPP funds.

Thanks, that's what I'm finding too - the Scottish Widows funds are very specific and don't seem to be available elsewhere, so will have to be transferred as cash.  Do you continue to pay into your Scottish Widows pension as well as your SIPP?

Yes, all of the extra contributions go into the Scottish Widows pension as the transfer was done as a partial transfer which leaves the original workplace pension open. The extra contributions get the employer contribution too. There is currently no need for us to add to the SIPP directly as it is more cost effective to go through Scottish Widows.

TVAS

It will be a cash transfer and you will be out of the market for a few days as the new provider should backdate the fund allocation when they received the cash as that is the effective started date of the transfer monies. 
0.4% as a total charge is cheap. You can get cheaper workplace pension funds at 0.10% but the range of funds is limited although they do try and match the investments type such as Global Equity, Emerging Markets, UK Equity etc. You suggest that you ca get under 0.4% which is good going I wouldn't worry of the charges when you want to take benefits all providers charge. Some will not charge if you just take TFC as that is a one off payment. If a provider charges you a annual fee if you have only taken cash that is a !!!!!! take. However you may want to suffer this injustices of the fund charges and performance are worth it.

You should have your employer first before you came here as per what Oldbeanz said. It is likely that you can do a transfer and keep the scheme open if it is a personal pension. You may be allowed a partial transfer if it is an occupational money purchase pension.

If your new Provider is part of the Origo system then it shouldn't take too long. Origo is a computer based transfer system between providers to avoid the delays caused in issuing paperwork via the post, so all communications is between the providers is on an online system. If it has to be via the post send recorded so you can track. I do not know how many times when I did pension transfer admin and the ceding or receiving scheme said we haven't received it when I knew they had.
 

justme111

BoracicLint said:

Albermarle said:

the charges are still 0.4% per year so there would be a significant saving in moving it to my SIPP.

Are you sure ?

Hargreaves Landsdown is the largest provider of SIPPs for the public. Their platform fee alone is 0.45% and then + any fund costs .The funds they promote cost >1 % although there are cheaper ways to invest as well.

A popular low cost SIPP provider is Vanguard . Their platform  fee is 0.15% and their standard multi asset and retirement funds are 0.22% and 0,24% .

If you get a SIPP and have a mixture of low cost and active funds , I would say a typical cost would be 0,6to 0,8%

You can get cheaper than 0.4% all in but it is a pretty competitive rate and probably there are no extra charges for anything , which is not usually the case for a SIPP .

Yes, my SIPP at ii is costing £120 per year and does not increase with the size of my investment, so it would make sense to move more into the SIPP and reduce the fees I'm paying to Scottish Widows.  If I transfer, I only have to consider the cost of the funds, which based on my portfolio of trackers are around 0.2%.  So I could still reduce the costs by half, although your point regarding 0.4% being competitive is valid - I will also need to consider extra charges that might be incurred when it comes to accessing the pension or transferring elsewhere in future.

Does not it cost £240/year- the investor loan plus the SIPP charge ? 
Or you have some other account with them so pay investor plan fees anyway ?

Albermarle

justme111 said:

BoracicLint said:

Albermarle said:

the charges are still 0.4% per year so there would be a significant saving in moving it to my SIPP.

Are you sure ?

Hargreaves Landsdown is the largest provider of SIPPs for the public. Their platform fee alone is 0.45% and then + any fund costs .The funds they promote cost >1 % although there are cheaper ways to invest as well.

A popular low cost SIPP provider is Vanguard . Their platform  fee is 0.15% and their standard multi asset and retirement funds are 0.22% and 0,24% .

If you get a SIPP and have a mixture of low cost and active funds , I would say a typical cost would be 0,6to 0,8%

You can get cheaper than 0.4% all in but it is a pretty competitive rate and probably there are no extra charges for anything , which is not usually the case for a SIPP .

Yes, my SIPP at ii is costing £120 per year and does not increase with the size of my investment, so it would make sense to move more into the SIPP and reduce the fees I'm paying to Scottish Widows.  If I transfer, I only have to consider the cost of the funds, which based on my portfolio of trackers are around 0.2%.  So I could still reduce the costs by half, although your point regarding 0.4% being competitive is valid - I will also need to consider extra charges that might be incurred when it comes to accessing the pension or transferring elsewhere in future.

Does not it cost £240/year- the investor loan plus the SIPP charge ? 
Or you have some other account with them so pay investor plan fees anyway ?

Yes £240, not £120

BoracicLint

justme111 said:

BoracicLint said:

Albermarle said:

the charges are still 0.4% per year so there would be a significant saving in moving it to my SIPP.

Are you sure ?

Hargreaves Landsdown is the largest provider of SIPPs for the public. Their platform fee alone is 0.45% and then + any fund costs .The funds they promote cost >1 % although there are cheaper ways to invest as well.

A popular low cost SIPP provider is Vanguard . Their platform  fee is 0.15% and their standard multi asset and retirement funds are 0.22% and 0,24% .

If you get a SIPP and have a mixture of low cost and active funds , I would say a typical cost would be 0,6to 0,8%

You can get cheaper than 0.4% all in but it is a pretty competitive rate and probably there are no extra charges for anything , which is not usually the case for a SIPP .

Yes, my SIPP at ii is costing £120 per year and does not increase with the size of my investment, so it would make sense to move more into the SIPP and reduce the fees I'm paying to Scottish Widows.  If I transfer, I only have to consider the cost of the funds, which based on my portfolio of trackers are around 0.2%.  So I could still reduce the costs by half, although your point regarding 0.4% being competitive is valid - I will also need to consider extra charges that might be incurred when it comes to accessing the pension or transferring elsewhere in future.

Does not it cost £240/year- the investor loan plus the SIPP charge ? 
Or you have some other account with them so pay investor plan fees anyway ?

Yes as I have a GIA and ISA with them, I pay £10pm already.  The SIPP is therefore only an additional £120/year.