Stakeholder scheme fees

aroominyork

I have just joined an organisation, replacing someone as the only (currently) employee. There is an Aviva pension scheme in place. Upsides: a wide choice of funds and low cost to the employer (£32 per month). Downside: 0.6% charges on my pension plan.

I moved my SIPP from HL to get away from 0.45% charges, so 0.6% sticks in my craw. Is 0.6% a typical annual charge for this type of pension or are there significantly better options out there please? (I would have authority to move the scheme away from Aviva.)

Albermarle

Do you mean 0.6% + fund costs or  0.6% all in, which  would be pretty typical for a workplace pension . Some might work out a bit cheaper and some a little less. 

aroominyork

Albermarle said:

Do you mean 0.6% + fund costs or  0.6% all in, which  would be pretty typical for a workplace pension . Some might work out a bit cheaper and some a little less. 

It is 0.6% ‘total charge’ if you use Aviva’s in-house default investment products, but other funds’ AMCs are of course added if you choose external funds.

Aviva's in-house funds are My Future Focus Growth and My Future Focus Consolidation, and the percentages in each change as you approach retirement, eg 70%/30% respectively seven years before retirement, 40%/60% four years before retirement.

The Growth fund is invested 56% equities, 25% fixed interest, 7% property, 12% cash. In the five years to 31 March 2021 it grew 49%. As a comparison, Vanguard VLS60 grew 52%. So as a low cost option for (in early years in the job, at least) relatively small amounts of money, it seems good enough.

dunstonh

 Downside: 0.6% charges on my pension plan.

That is not a downside.  Its not the cheapest but its certainly at the right end.

I moved my SIPP from HL to get away from 0.45% charges, so 0.6% sticks in my craw. Is 0.6% a typical annual charge for this type of pension or are there significantly better options out there please?

You are not comparing like for like. 

HL charge 0.45% plus fund charges.   Aviva stakeholder pensions are mono charged. ie. all in.   So, that 0.6% is provider and fund charge combined.  (there may be the odd fund that goes above 0.6% where external managers apply).

For reference, its best not to post in this section as hardly anyone looks in here.  The main pension section is the best place.