What do we need? Pension advisor? Financial advisor? Are they the same or different?!

Emanef

Hi all, just following up on this as we're trying to get organised with it an have spoken to a couple of IFAs. 

I have question about my wife's former company pension. Our preferred IFA is looking to set up private pensions for us both with a charge 1% of any contributions or transfers, and ongoing there will be an annual charge of 0.75% per year. I need to clarify as I'm not 100% sure from his proposal, but it seems there will also be an annual charge or 0.75% for managing my wife's former work pension, which is currently worth around £350k, which would be around £2625 on its own. Does that sound like a normal/reasonable amount? Or should we be asking him to look at capping that? 

He's also proposing charging a fixed £800 fee for the work of setting up the pensions, etc instead of a percentage. We're looking at putting in £10k each, so total £20 for this year to get them started, and at least similar a year ongoing. Does this sound a reasonable fee?

This is all so confusing......no wonder we've both ignored pensions for so long! 

Albermarle

It would make sense to include your wife's former work pension, assuming it is a DC pension that holds investments. Often ( in fact most of the time) people are oblivious to how their pension is invested, and we often get posters on here who realise too late that their pension has not been invested appropriately.
A pot of that size would normally have an ongoing charge of 0.75% to 0.5% so you could try and knock them down to the lower figure.
On the other hand 0.75% on the two new pensions is low, as there will be only be smaller amounts in them for a few years.

An alternative is to DIY, but you would need to spend some time learning about investments, tax relief, withdrawal strategies etc which you may not feel inclined to do.

dunstonh

I have question about my wife's former company pension. Our preferred IFA is looking to set up private pensions for us both with a charge 1% of any contributions or transfers, and ongoing there will be an annual charge of 0.75% per year. I need to clarify as I'm not 100% sure from his proposal, but it seems there will also be an annual charge or 0.75% for managing my wife's former work pension, which is currently worth around £350k, which would be around £2625 on its own. Does that sound like a normal/reasonable amount?

It is in the ballpark.

Adviser charges tend to float between 0.50% to 1.00%    Many taper their charges based on fund value.  i.e. the more you have, the lower the percentage.    £350k is a level where 0.75% is commonplace (often seeing 0.50% with slightly higher values).     Business models will vary and you will find some at 1.0% at that level or 0.50%.

He's also proposing charging a fixed £800 fee for the work of setting up the pensions, etc instead of a percentage. We're looking at putting in £10k each, so total £20 for this year to get them started, and at least similar a year ongoing. Does this sound a reasonable fee?

It seems strange to charge a fixed fee for a monetary top up and then a percentage fee for the transfer.    At that level, you would expect the two to be considered together. Especially as the keying in of the transfer and the monetary top up use the same process and administration.  i.e. there is very little additional work for the top up when doing a transfer between providers.   So, if the initial charge was 1%, then you would expect that to carry across to the top up.

This is all so confusing......no wonder we've both ignored pensions for so long! 

The advice should not be confusing. That is what the adviser is there to make easier.
The fee structure in your case is a bit more unusual to the typical with the split on method but the ongoing is normal.

Bostonerimus1

Definitely use a solicitor to set up wills and estate details. It should be a one time charge.

For your pension arrangements you might or might not need IFA advice. Your pension arrangements will depend on how you pay yourself so I assume you are paying yourselves a salary and also paying Class 2 NI.

xylophone

Have you both obtained state pension forecasts?

https://www.gov.uk/check-state-pension

Bostonerimus1

xylophone said:

Have you both obtained state pension forecasts?

https://www.gov.uk/check-state-pension

Yes, the results of that will factor into the dividend vs salary question

Emanef

dunstonh said:

I have question about my wife's former company pension. Our preferred IFA is looking to set up private pensions for us both with a charge 1% of any contributions or transfers, and ongoing there will be an annual charge of 0.75% per year. I need to clarify as I'm not 100% sure from his proposal, but it seems there will also be an annual charge or 0.75% for managing my wife's former work pension, which is currently worth around £350k, which would be around £2625 on its own. Does that sound like a normal/reasonable amount?

It is in the ballpark.

Adviser charges tend to float between 0.50% to 1.00%    Many taper their charges based on fund value.  i.e. the more you have, the lower the percentage.    £350k is a level where 0.75% is commonplace (often seeing 0.50% with slightly higher values).     Business models will vary and you will find some at 1.0% at that level or 0.50%.

He's also proposing charging a fixed £800 fee for the work of setting up the pensions, etc instead of a percentage. We're looking at putting in £10k each, so total £20 for this year to get them started, and at least similar a year ongoing. Does this sound a reasonable fee?

It seems strange to charge a fixed fee for a monetary top up and then a percentage fee for the transfer.    At that level, you would expect the two to be considered together. Especially as the keying in of the transfer and the monetary top up use the same process and administration.  i.e. there is very little additional work for the top up when doing a transfer between providers.   So, if the initial charge was 1%, then you would expect that to carry across to the top up.

This is all so confusing......no wonder we've both ignored pensions for so long! 

The advice should not be confusing. That is what the adviser is there to make easier.
The fee structure in your case is a bit more unusual to the typical with the split on method but the ongoing is normal.

To be fair, the proposal from the IFA is comprehensive but well explained and understandable - it all the knowing what's best, how much we should be paying, etc that's confusing! Getting there though, and thanks for the comprehensive reply, all really helpful!

And yes, I had checked those and we're both on course for full state pensions - do couples both get the full amount each? I recall in the past that only one person in a couple got the full amount, the spouse got less? Or was that in the days when men tended to be the one to work and wives didn't so much/brought up the kids so didn't make the contributions?

Getting wills sorted out as well, have spoken to a solicitor about doing wills (and they've advised us both to lasting power of attorney forms as well - they recommended to do it ourselves as cheaper and easy to do)

Albermarle

Emanef said:

dunstonh said:

I have question about my wife's former company pension. Our preferred IFA is looking to set up private pensions for us both with a charge 1% of any contributions or transfers, and ongoing there will be an annual charge of 0.75% per year. I need to clarify as I'm not 100% sure from his proposal, but it seems there will also be an annual charge or 0.75% for managing my wife's former work pension, which is currently worth around £350k, which would be around £2625 on its own. Does that sound like a normal/reasonable amount?

It is in the ballpark.

Adviser charges tend to float between 0.50% to 1.00%    Many taper their charges based on fund value.  i.e. the more you have, the lower the percentage.    £350k is a level where 0.75% is commonplace (often seeing 0.50% with slightly higher values).     Business models will vary and you will find some at 1.0% at that level or 0.50%.

He's also proposing charging a fixed £800 fee for the work of setting up the pensions, etc instead of a percentage. We're looking at putting in £10k each, so total £20 for this year to get them started, and at least similar a year ongoing. Does this sound a reasonable fee?

It seems strange to charge a fixed fee for a monetary top up and then a percentage fee for the transfer.    At that level, you would expect the two to be considered together. Especially as the keying in of the transfer and the monetary top up use the same process and administration.  i.e. there is very little additional work for the top up when doing a transfer between providers.   So, if the initial charge was 1%, then you would expect that to carry across to the top up.

This is all so confusing......no wonder we've both ignored pensions for so long! 

The advice should not be confusing. That is what the adviser is there to make easier.
The fee structure in your case is a bit more unusual to the typical with the split on method but the ongoing is normal.

To be fair, the proposal from the IFA is comprehensive but well explained and understandable - it all the knowing what's best, how much we should be paying, etc that's confusing! Getting there though, and thanks for the comprehensive reply, all really helpful! It is a bit like getting quotes from tradespeople to work on your house, in the end you have to make a judgement on what is the best overall deal.

And yes, I had checked those and we're both on course for full state pensions - do couples both get the full amount each? Yes as long as they have enough qualifying years.I recall in the past that only one person in a couple got the full amount, the spouse got less? Or was that in the days when men tended to be the one to work and wives didn't so much/brought up the kids so didn't make the contributions?

Getting wills sorted out as well, have spoken to a solicitor about doing wills (and they've advised us both to lasting power of attorney forms as well - they recommended to do it ourselves as cheaper and easy to do)That is good advice.

See in bold above

Bostonerimus1

Emanef said:

dunstonh said:

I have question about my wife's former company pension. Our preferred IFA is looking to set up private pensions for us both with a charge 1% of any contributions or transfers, and ongoing there will be an annual charge of 0.75% per year. I need to clarify as I'm not 100% sure from his proposal, but it seems there will also be an annual charge or 0.75% for managing my wife's former work pension, which is currently worth around £350k, which would be around £2625 on its own. Does that sound like a normal/reasonable amount?

It is in the ballpark.

Adviser charges tend to float between 0.50% to 1.00%    Many taper their charges based on fund value.  i.e. the more you have, the lower the percentage.    £350k is a level where 0.75% is commonplace (often seeing 0.50% with slightly higher values).     Business models will vary and you will find some at 1.0% at that level or 0.50%.

He's also proposing charging a fixed £800 fee for the work of setting up the pensions, etc instead of a percentage. We're looking at putting in £10k each, so total £20 for this year to get them started, and at least similar a year ongoing. Does this sound a reasonable fee?

It seems strange to charge a fixed fee for a monetary top up and then a percentage fee for the transfer.    At that level, you would expect the two to be considered together. Especially as the keying in of the transfer and the monetary top up use the same process and administration.  i.e. there is very little additional work for the top up when doing a transfer between providers.   So, if the initial charge was 1%, then you would expect that to carry across to the top up.

This is all so confusing......no wonder we've both ignored pensions for so long! 

The advice should not be confusing. That is what the adviser is there to make easier.
The fee structure in your case is a bit more unusual to the typical with the split on method but the ongoing is normal.

To be fair, the proposal from the IFA is comprehensive but well explained and understandable - it all the knowing what's best, how much we should be paying, etc that's confusing! Getting there though, and thanks for the comprehensive reply, all really helpful!

And yes, I had checked those and we're both on course for full state pensions - do couples both get the full amount each? I recall in the past that only one person in a couple got the full amount, the spouse got less? Or was that in the days when men tended to be the one to work and wives didn't so much/brought up the kids so didn't make the contributions?

Getting wills sorted out as well, have spoken to a solicitor about doing wills (and they've advised us both to lasting power of attorney forms as well - they recommended to do it ourselves as cheaper and easy to do)

So you say you are on course for full SP, so I assume your accountant has compared the dividend vs salary payment approach and the tax and pension implications to minimize income tax and NIC amounts so you can continue to add to your NI years. Are you looking at personal pensions to minimize tax on your salary? Watch out for on going charges on those pensions and IFA fees as those can be a killer and factor them into the overall tax savings with a pension.

Emanef

Just a question; how easy/difficult is it to arrange setting up a pension ourselves to make payments from our limited company? Ie instead of doing it through a third party who would want to take a chunk? Presumably we could just contact a few of the big pension companies, but is there a specific type we'd need to be setting up to make sure we get the tax break by paying it from our limited company?