Pension Drawdown Plans

Spivo46

I am currently with Royal London and talking to them about moving into a pension drawdown plan. I believe their fees overall are just below average in comparison to other providers. Are there any general thoughts on moving over into drawdown plans? fees and investment strategies? Are there other considerations to take into account?

Company	Company type	Annual Sipp fee	Annual drawdown fee	Core charges - £100k (a)	Core charges - £250k (a)	Core charges - £500k (a)
Advance (formerly Zurich)	L&P	£0	£75	0.43%	0.35%	0.30%
Aegon - ARC	L&P	£0	£75	0.62%	0.52%	0.26%
AJ Bell Youinvest	DIY	£0	£0	0.25%	0.25%	0.18%
Aviva - OIS	L&P	£0	£0	0.38%	0.36%	0.31%
Barclays Smart Investor (b)	DIY	£150	£120	0.47%	0.31%	0.25%
Bestinvest (c)	DIY	£0	£0	0.40%	0.40%	0.30%
Charles Stanley Direct	DIY	£0	£0	0.35%	0.35%	0.28%
Close Brothers	DIY	£180	£0	0.43%	0.32%	0.29%
EQi (d)	DIY	£118.80	£180	0.57%	0.38%	0.26%
Fidelity	DIY	£0	£0	0.35%	0.20%	0.20%
Fidelity Adviser Solutions	Wrap	£0	£45	0.30%	0.27%	0.26%
Halifax	DIY	£180 (e)	£180	0.36%	0.14%	0.07%
Hargreaves Lansdown	DIY	£0	£0	0.45%	0.45%	0.35%
Interactive Investor (f)	DIY	£156	£0	0.16%	0.06%	0.03%
Legal & General (g)	L&P	£0	£0	0.25%	0.25%	0.25%
LV - FTA (h)	L&P	£0	£0	0.30%	0.30%	0.30%
M&G Wealth Platform	Wrap	£0	£0	0.30%	0.30%	0.30%
Nucleus	Wrap	£0	£0	0.33%	0.33%	0.33%
PensionBee (i)	OPC	£0	£0	0.50%	0.35%	0.30%
People's Pension	MT	£0	£2.50	0.25%	0.22%	0.21%
Prudential - Retirement Account	L&P	£0	£0	0.20%	0.15%	0.15%
Quilter - CRA (j)	L&P	£0	£0	0.30%	0.27%	0.24%
Royal London - Pension Portfolio	L&P	£0	£0	0.45% (k)	0.40% (k)	0.40% (k)
Scottish Widows - Retirement Acct	L&P	£0	£0	0.30%	0.25%	0.20%
Standard Life (l)	L&P	£0	£0	0.52%	0.52%	0.52%
Transact	Wrap	£80	£0	0.34%	0.29%	0.28%
Vanguard (m)	DIY	£0	£0	0.15%	0.15%	0.08%

JohnWinder

Fees are the only element of your net returns that you have control over; don’t forfeit it lightly, since a small difference in percentage fee can have a big effect on the pounds you receive if there’s lots of pounds over lots of years.

Vanguard has the lowest fees which all UK investors should cheer, whether they buy their products or not, for the downward pressure they put on others’ fees. They also have some decent products. What are you waiting for, or what am I missing?

NedS

Some with large percentage fees like HL also operate a capped fee structure for shares, ITs and ETFs of £200/year, which can work out a lot cheaper if you just want to invest in a global tracker, for example (e.g, HMWO, VWRL etc)

On a fixed-fee basis, HL would come in at 0.2%, 0.08% and 0.04% in your table above taking them from being the most expensive to almost the cheapest.

Whilst fees are really important, also consider services offered, customer service and ease of accessing the services you want (e.g, flexi-access drawdown, UFPLS etc)

dunstonh

I am currently with Royal London and talking to them about moving into a pension drawdown plan. I believe their fees overall are just below average in comparison to other providers.

Not the cheapest but certainly at the right end.  Also, as a mutual, they return some of their profits to policyholders each year.  Its a good simple option for those that are not experienced in these things.

Quite a few on that list of yours no longer exist (due to rebranding or takeovers).   Several have truly awful software and/or service.    

The list is missing many.  It seems a strange list as its a combination of some DIY providers and some intermediary providers.    If you are going DIY, then you need to look only at DIY providers.  If you are using an independent intermediary then they may have better terms than the published default.  I can see at least 5 that have higher pricing in your list.    A couple of higher pricing for their in house salesforce (if you went direct) compared to the intermediary pricing.

What is the L&P tag in the table?   In the intermediary world, L&P means life & pensions - i.e. insured contracts.   However, multiple providers on the intermediary side in that list that have L&P are not L&P.

Spivo46

My current fund value is around £400k. Royal London also offer profit share. I have been with them for 6 years and each year profit share has paid over £250 each year. Customer service is ok and online service is poor. sometimes better the devil you know but Royal London have asked me to consider shopping around first. I would like to remain in some moderately cautious diversified fund. 

Doctor_Who

As NedS said - also consider ease of platform use and the services offered etc, together with the fees. Obviously it's difficult to determine the processes for FAD/UFPLS etc without actually having an account and using the service. I have been with II for many years and the customer service has definitely improved over the years. Recently I started taking UFPLS withdrawals from my II SIPP and everything was done online, with the money in my current account within 10 days.

Here's a recent thread on SIPP drawdown providers:

https://forums.moneysavingexpert.com/discussion/6463221/recommended-sipp-for-pension-draw-down

Billxx

I have been with RL for about 5 years.  In that time I have had to contact them 4 or 5 times, never had a problem with customer service.  My pension is within one of their governed portfolios, I have no desire to do my own thing so selected a fund with medium risk.  It has performed well so far.

dunstonh

Spivo46 said:

My current fund value is around £400k. Royal London also offer profit share. I have been with them for 6 years and each year profit share has paid over £250 each year. Customer service is ok and online service is poor. sometimes better the devil you know but Royal London have asked me to consider shopping around first. I would like to remain in some moderately cautious diversified fund. 

RL historically have been pretty good on the downside but not as strong on the upside.   However, the GP range allows you to switch out the equity fund into a tracker.  So, you can allow them to use managed funds on the defensive assets, where they are stronger and passive on the equities.

Spivo46

Billxx said:

I have been with RL for about 5 years.  In that time I have had to contact them 4 or 5 times, never had a problem with customer service.  My pension is within one of their governed portfolios, I have no desire to do my own thing so selected a fund with medium risk.  It has performed well so far.

Hi Bill - Thanks for the feedback. Did an advisor recommend this for you? Van i ask if you are retired and drawing down and what fund are you in please?

Spivo46

dunstonh said:

I am currently with Royal London and talking to them about moving into a pension drawdown plan. I believe their fees overall are just below average in comparison to other providers.

Not the cheapest but certainly at the right end.  Also, as a mutual, they return some of their profits to policyholders each year.  Its a good simple option for those that are not experienced in these things.

Quite a few on that list of yours no longer exist (due to rebranding or takeovers).   Several have truly awful software and/or service.    

The list is missing many.  It seems a strange list as its a combination of some DIY providers and some intermediary providers.    If you are going DIY, then you need to look only at DIY providers.  If you are using an independent intermediary then they may have better terms than the published default.  I can see at least 5 that have higher pricing in your list.    A couple of higher pricing for their in house salesforce (if you went direct) compared to the intermediary pricing.

What is the L&P tag in the table?   In the intermediary world, L&P means life & pensions - i.e. insured contracts.   However, multiple providers on the intermediary side in that list that have L&P are not L&P.

Thats useful, i am pleased i posted this list. it was provide by WHICH. A "good simple option" sounds ok to me. i also like the thought of being with a long standing household name provider.

dunstonh

Thats useful, i am pleased i posted this list. it was provide by WHICH

Probably compiled many years ago.  For example, Zurich rebranded their platform to Advance.  They then sold it to Embark in 2020.  Embark was bought by Lloyds Bank in 2022.  Lloyds have launched a new platform under the Scottish Widows brand and Advance is being closed and transferred to Scottish Widows (both use FNZ so it should be a clean move).     Aviva is out of date with its offerings as is Standard Life 
Pricing is out of date or wrong with several (ignoring special terms).

 A "good simple option" sounds ok to me. i also like the thought of being with a long standing household name provider.

It's only real failing as simple options go, is that it largely paper-based in set out.