Vanguard - Pension Financial Planning

andyuk01

kuratowski said:

andyuk01 said:

pension value of £198k currently, total contributions of just over £20k per year 

At these values Vanguard, may not be the most cost effective platform for you.  Have you considered one of the fixed-fee platforms?  I.e. iWeb/Halifax/interactive investor.

I've always liked the simplicity and structure of the vanguard funds, even if i didn't use their advised service i would still move to them 

And you would be still able to buy Vanguard funds if you wished, from other whole of market providers, but would also have access to a wider range of investments from other fund managers.

Thank you for those comments 

This hadn't occurred to me, i see II operate on a fixed monthly fee rather than % which would be cheaper 

I'll take a look at this!

Albermarle

andyuk01 said:

Albermarle said:

As said it is strange that you should lose the previously existing discount . I think that used to happen more regularly in the past when you left an employer, but I thought it was not even allowed anymore , although I am not 100% sure.

Is the 0.5% fee levied by Vanguard worthwhile for someone in my situation, which is a high appetite for risk and plan to increase pension contributions over the next few years with a progressively lower appetite for risk over the next 15 years 
'Is paying a financial advisor  worth it ' is a question asked many times on this forum . The answers normally vary quite a lot ( to put it diplomatically ) and in the end it is up to you ,as its difficult to exactly assess the benefits .
However there is a consensus that you are better finding a local IFA , than ones who work directly for an investment company or who work for large national 'wealth management' companies.
Also there is probably a consensus that you need one more if your affairs are complicated ( trusts, blended families, divorce, very large funds , major IHT/LTA issues etc ) 

 In my head there will be a point in the future where my pension will be largely allocated safer funds / bonds so that the 0.5% for rebalancing won't be required, but in the accumulation phase its a worthwhile expense for the benefit it brings 
I think most people would say the drawdown stage is more critical than the accumulation phase . In any case going too safe in drawdown is not recommended. If things go wrong in the accumulation phase you have time to correct it and you are still bringing in a salary . 

Thank you for those comments 

Appreciate it is a vague and often asked question, i guess my situation is relatively simple 

I'm aiming for the LTA at 57/58, my other half has a good DB pension from the police and by the time I'm approaching 55 the mortgage will be paid off. Barring any major lifestyle changes my earnings potential should continue to increase. No real debt and a cash buffer for rainy days with no financial complexity 

In this case it probably boils down to whether you want to manage your own investments which needs a  bit of work/background reading etc but it's not rocket science.( plenty of info online nowadays ) and understand various tax implications OR pay someone else to do it . There is no guarantee that paying an IFA will get a better result ( whatever better means in this context ) but should prevent you making a mess of it .

jamesd

Albermarle said:

As said it is strange that you should lose the previously existing discount . I think that used to happen more regularly in the past when you left an employer, but I thought it was not even allowed anymore , although I am not 100% sure.

It's not allowed on new schemes but existing schemes with one could continue in some cases.

The FCA consultation was CP14/24 (PDF)  and rules were made in PS15/5 (web page overview), (rule PDF page 25: 3. The ban on differential charges):

"3.2 Our proposed rules stop providers of workplace personal pensions taking actions that will increase member charges, based solely on whether a member continues to make contributions to the scheme. The ban on differential charging should apply to all members of personal pension schemes and stakeholder schemes used by employers as Qualifying Schemes, not just to default funds for automatic enrolment.

3.3 The ban will apply to the schemes of any members who make a contribution while still working for their employer on or after 6 April 2016.

...

3.5 All respondents agreed that all members in Qualifying Schemes, not just in default funds for automatic enrolment, should be covered by the protections from differential charges (in particular Active Member Discounts or AMDs) under the proposed rules."

Any scheme that couldn't do this was barred from being used for auto-enrolment.

I have one with SL with a discount of 0.75% but my employer was still paying in on 6 April 2016.

If you're curious I'm currently paying a size-weighted 0.819% with these individual charges, which include both fund AMC and fund additional charges:

1.057% SL ASI Global Smaller Companies
0.746% SL ASI UK Smaller Companies
1.445% SL Fidelity Asia
1.010% SL JP Morgan Emerging Markets
1.105% SL Jupiter UK Mid Cap
0.277% SL Vanguard FTSE Developed World Hedged

jamesd

andyuk01 said:

The explanation that was given is that the 0.68% 'discount' on the AMC is only available to active members of the scheme, once our new pension account was in place and the TUPE process completed, we lost that discount 

I suggest that you ask them to explain how this which appears to be an "active member discount"  is compliant with FCA PS15/5 which prohibits active member discounts, quoting the bits I quoted from it.