Vanguard charges discrepancy

Swipe

jimjames said:

Swipe said:

BoyJohn811 said:

Thanks for the comments.

I believe I might have found the reason for this discrepancy. One account is an ISA, the other is a general savings account (the one where most of the charges can be seen). I found this on Vanguard's site: 'Keep a small amount of cash in a General Account and the fees will be taken from the cash in there.' So, it appears that if there is no DD set up for charges, Vanguard automatically charges the general savings account instead of touching ISA accounts. That is why one of the two accounts shows very little charge, that one is ISA. 

I hope this helps others as well

Yep, you always want to pay the charges from your GIA if you have no DD set up to fully maximise your ISA

And the opposite for pensions, why pay from taxed income when you can pay with tax relief!

The trouble is, Vanguard always defaults to the GIA for their fees

BoyJohn811

jimjames said:

BoyJohn811 said:

Thanks for the comments. I believe I might have found the reason for this discrepancy.
I hope this helps others as well

Were the funds invested at exactly the same time? Charges will be based on how long the investments have been held so if not fully owned for the whole quarter then you'll only be charged a proportion of the fee for that time based on the number of days.

No, they were not invested at the same time. 'Investment 2', the one with a lot more charges, is actually 1 year younger - so in theory, it should have less charge. I believe it really is the fact that Vang charges GIAs not ISAs.

Albermarle

jimjames said:

Swipe said:

BoyJohn811 said:

Thanks for the comments.

I believe I might have found the reason for this discrepancy. One account is an ISA, the other is a general savings account (the one where most of the charges can be seen). I found this on Vanguard's site: 'Keep a small amount of cash in a General Account and the fees will be taken from the cash in there.' So, it appears that if there is no DD set up for charges, Vanguard automatically charges the general savings account instead of touching ISA accounts. That is why one of the two accounts shows very little charge, that one is ISA. 

I hope this helps others as well

Yep, you always want to pay the charges from your GIA if you have no DD set up to fully maximise your ISA

And the opposite for pensions, why pay from taxed income when you can pay with tax relief!

With my provider, they ask that if possible I should move money from my ISA and SIPP to a money management account where the charges will be taken. However when I tried to move money from my SIPP, they said it was not allowed without a phone discussion about going into drawdown etc .
So every month the provider moves cash from my SIPP to this money management account to pay the charges.
It seems they are allowed to take money from my SIPP without any tax implications. I am not complaining ( the amounts are peanuts anyway) but it seems a bit odd that they are allowed to do that.