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Transferring workplace & private pension (L&G & SJP) via IFA - UPDATE

DeadlyD
DeadlyD Posts: 132 Forumite
100 Posts Second Anniversary Name Dropper
UPDATE - Dear Forumites,
I have 2 quotes from IFA's - one a well known wealth management company in my County and another sole trader - I've discounted the latter for various reasons, not least trying to charge me for advice but anyway I've been through the charges;- 

1.  transfer of the L&G approx £200k (I'm leaving the SJP until Oct 24 due to early withdrawal charges) are 1.75% (I'm OK with that) - 
2. 0.75% management charge - OK 
3. recommendation Quilter and fund management = 1.15%

Overall Per annum management charges are 1.90% 

As I will be drawing down by UFPLS my tax free allowance and 25% = £16,760 pa, I will be paying nearly £4k (yr1 but obviously 1.90% on total funds) on management fees on a proposed 7% increase on funds. Risk category 7 
Now I'm concerned that on the L&G approx £200k the charges of nearly 2% per annum 

My SJP is 1.72% which I thought was expensive. 

I understand the value of management from the IFA, but my affairs are relatively simple and I have the time now to manage myself, being retired. 

Is there a "packaged" pension that would provide the same type of return - 7% or forecast as a 7 cat risk @ 9.8% pa OR am I paying for that expertise in the fund management of Quilter for that good % return. 

TIA! Deadly 



Hello Forumites,
Having considered the invaluable advice I have received from this forum, I have both transferred an old DB pension into a L&G workplace pension and more recently accessed preliminary advice from an IFA I found via Unbiased. 
I have now retired early(57 yrs) from my life long career and am now volunteering. 
Before I agree to the strategy advised by the IFA I am seeking opinions as to whether the provider and fees are a good move. I'm not sure I understand the performance by all the different graphs the IFA has sent me and whether indeed Aviva is the right choice. Ideally, I don't want to pay to move my pension again in the near future. 
So, my L&G is worth approx £195,000 unmanaged workplace WPL_ LEGAL & GENERAL WORKSAVE PENSION SCHEME E and a SJP managed pension that has a 1.40% withdrawal penalty - approx value £140,000 
Aviva Vantage 80 is the IFA recommendation with a 1.5% transfer fee on the L&G and a combined ongoing .75% management fee pa. 
I have asked for a presentation of performance V L&G & SJP see below. Thoughts? Is Aviva a better option or the best for drawdown?

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Comments

  • MallyGirl
    MallyGirl Posts: 7,091 Senior Ambassador
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Aviva or Vanguard?
    I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
    & Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
    All views are my own and not the official line of MoneySavingExpert.
  • DeadlyD
    DeadlyD Posts: 132 Forumite
    100 Posts Second Anniversary Name Dropper
    MallyGirl said:
    Aviva or Vanguard?
    Aviva is the recommendation from the IFA 

  • xylophone
    xylophone Posts: 45,426 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    What has  influenced your decision to go the advised route rather than opening a SIPP which you could manage yourself?

    Is the plan to  transfer out of SJP when you can do so without penalty?

    SIPP drawdown comparison here

    https://monevator.com/compare-uk-cheapest-online-brokers/comment-page-6/

    https://www.thetimes.co.uk/money-mentor/article/best-pension-drawdown-providers/
  • DeadlyD
    DeadlyD Posts: 132 Forumite
    100 Posts Second Anniversary Name Dropper
    xylophone said:
    What has  influenced your decision to go the advised route rather than opening a SIPP which you could manage yourself?


    Is the plan to  transfer out of SJP when you can do so without penalty?

    SIPP drawdown comparison here

    https://monevator.com/compare-uk-cheapest-online-brokers/comment-page-6/

    https://www.thetimes.co.uk/money-mentor/article/best-pension-drawdown-providers/
    I didn’t even consider a SIPP as I thought the  management would require an element of expertise and I don’t have any experience of investments. Maybe it is easier than I anticipated? 
    Thanks for links I’ll take a look. 
    The IFA reckons combining SJP with a penalty now would be more advantageous. 
    I haven’t drawn anything from my pensions as yet but I’d like to take the a small % of the 25% tax free and the annual tax free allowance of £12,570 

  • dunstonh
    dunstonh Posts: 118,562 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    edited 10 October 2023 am31 8:27AM
    DeadlyD said:
    MallyGirl said:
    Aviva or Vanguard?
    Aviva is the recommendation from the IFA 

    Aviva and Vanguard both use the some backend software (FNZ).    Vanguard is heavily locked down and customised as it only offers Vanguard funds.  Aviva doesn't lock down in terms of funds availability as its whole of market.   However, their front end and configuration settings are pretty locked down compared to other platforms that use FNZ.  It is also a pain in the neck to use if you are using multi-wrapper and want movements between wrappers.

    We used to use Aviva as the budget option (we have special terms with them - but so do most IFAs as they give them away pretty easily)  and present it to people as the budget option.  i.e. its cheap but it is cheap in terms of functionality and options.     

    I didn’t even consider a SIPP as I thought the  management would require an element of expertise and I don’t have any experience of investments. Maybe it is easier than I anticipated? 
    The Aviva product will be a SIPP.  The Vanguard product is a SIPP in name but not in functionality.,

    The IFA reckons combining SJP with a penalty now would be more advantageous. 
    It usually is for low cost options. i.e. yes, there is a penalty but if you stay with them and are paying 1% a year more in charges anyway, then the penalty is just being spread annually rather than in one go.




    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • xylophone
    xylophone Posts: 45,426 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I didn’t even consider a SIPP as I thought the  management would require an element of expertise and I don’t have any experience of investments. Maybe it is easier than I anticipated? 

    It would be possible for you to open a SIPP and then request the SIPP provider to arrange a transfer in of your pension(s) - this could be done one at a time so as to avoid any early transfer out charge (if that is what SJP apply).

    You would then be responsible for choosing your own investments.

    Some providers offer ready made portfolios - you could read about Fidelity Pathfinder tool for example.

    You would need to do some research and reading before making your decision on IFA/DIY route.



    I haven’t drawn anything from my pensions as yet but I’d like to take the a small % of the 25% tax free and the annual tax free allowance of £12,570 

    UFPLS? See

    https://www.mandg.com/pru/adviser/en-gb/insights-events/insights-library/ufpls#:~:text=Uncrystallised funds pension lump sum (UFPLS) allows pension holders to,at the point of withdrawal.


    .........If the same client decided that they only wished to withdraw sufficient to utilise their Personal Allowance they could take £16,760 UFPLS a year, they'd get £4,190 tax-free and £12,570 taxed at their marginal rate.

    If they had no other income, currently their personal allowance would cover the £12,570 - so there would be no tax payable.........


    SIPP providers provide Guides to the process - examples

    https://www.fidelity.co.uk/planning-guidance/investment-guides/retirement-income-guide/


    https://www.hl.co.uk/free-guides/ufpls?SQ_DESIGN_NAME=ppc&theSource=PCGSV&Override=1&adg=G+SIPPUFLS+UFPLS+E+RSA&gad=1&gclid=EAIaIQobChMI0ZPumIXrgQMVhe3tCh0YQQKIEAAYASAAEgJvJPD_BwE

  • DeadlyD
    DeadlyD Posts: 132 Forumite
    100 Posts Second Anniversary Name Dropper
    :
    DeadlyD said:
    MallyGirl said:
    Aviva or Vanguard?
    Aviva is the recommendation from the IFA 

    Aviva and Vanguard both use the some backend software (FNZ).    Vanguard is heavily locked down and customised as it only offers Vanguard funds.  Aviva doesn't lock down in terms of funds availability as its whole of market.   However, their front end and configuration settings are pretty locked down compared to other platforms that use FNZ.  It is also a pain in the neck to use if you are using multi-wrapper and want movements between wrappers.

    We used to use Aviva as the budget option (we have special terms with them - but so do most IFAs as they give them away pretty easily)  and present it to people as the budget option.  i.e. its cheap but it is cheap in terms of functionality and options.     

    I didn’t even consider a SIPP as I thought the  management would require an element of expertise and I don’t have any experience of investments. Maybe it is easier than I anticipated? 
    The Aviva product will be a SIPP.  The Vanguard product is a SIPP in name but not in functionality.,

    The IFA reckons combining SJP with a penalty now would be more advantageous. 
    It usually is for low cost options. i.e. yes, there is a penalty but if you stay with them and are paying 1% a year more in charges anyway, then the penalty is just being spread annually rather than in one go.


    The IFA recommended Aviva it seemed based on his relationship with them that rang a few alarm bells as to whether they are the best option for my funds, which I wont be contributing into anymore, taking the minimum I can but need to see a good % growth as this pension combined needs to last me for 20 yrs plus given the transfer fee, annual charge (.75%) I want to make the right decision now as the L&G plan is stagnant. 


    Are you saying Aviva are a budget option which would mean not as much growth as a more expensive provider? 
    Its a SIPP - but managed by the IFA for .75% then?
  • DeadlyD
    DeadlyD Posts: 132 Forumite
    100 Posts Second Anniversary Name Dropper
    @dunstonhThe IFA recommended Aviva it seemed based on his relationship with them that rang a few alarm bells as to whether they are the best option for my funds, which I wont be contributing into anymore, taking the minimum I can but need to see a good % growth as this pension combined needs to last me for 20 yrs plus given the transfer fee, annual charge (.75%) I want to make the right decision now as the L&G plan is stagnant. 

    And the performance .. over the last 12months Aviva hasn't performed as well as SJP 
  • DeadlyD
    DeadlyD Posts: 132 Forumite
    100 Posts Second Anniversary Name Dropper
    xylophone said:
    I didn’t even consider a SIPP as I thought the  management would require an element of expertise and I don’t have any experience of investments. Maybe it is easier than I anticipated? 

    It would be possible for you to open a SIPP and then request the SIPP provider to arrange a transfer in of your pension(s) - this could be done one at a time so as to avoid any early transfer out charge (if that is what SJP apply).

    You would then be responsible for choosing your own investments.

    Some providers offer ready made portfolios - you could read about Fidelity Pathfinder tool for example.

    You would need to do some research and reading before making your decision on IFA/DIY route.

    I read about the ready made portfolio, this is what I need to investigate. I guess my concern is would the IFA increase my funds more substantially than I would be capable of for a .75% fee. Its the risk factor of not being educated... yet!



    I haven’t drawn anything from my pensions as yet but I’d like to take the a small % of the 25% tax free and the annual tax free allowance of £12,570 

    UFPLS? See

    Thank you! Yes that's exactly what I intend to do

    https://www.mandg.com/pru/adviser/en-gb/insights-events/insights-library/ufpls#:~:text=Uncrystallised funds pension lump sum (UFPLS) allows pension holders to,at the point of withdrawal.


    .........If the same client decided that they only wished to withdraw sufficient to utilise their Personal Allowance they could take £16,760 UFPLS a year, they'd get £4,190 tax-free and £12,570 taxed at their marginal rate.

    If they had no other income, currently their personal allowance would cover the £12,570 - so there would be no tax payable.........


    SIPP providers provide Guides to the process - examples

    https://www.fidelity.co.uk/planning-guidance/investment-guides/retirement-income-guide/


    https://www.hl.co.uk/free-guides/ufpls?SQ_DESIGN_NAME=ppc&theSource=PCGSV&Override=1&adg=G+SIPPUFLS+UFPLS+E+RSA&gad=1&gclid=EAIaIQobChMI0ZPumIXrgQMVhe3tCh0YQQKIEAAYASAAEgJvJPD_BwE

    Brilliant info - thanks for the reading material. 
  • Albermarle
    Albermarle Posts: 25,956 Forumite
    10,000 Posts Sixth Anniversary Name Dropper
    DeadlyD said:
    @dunstonhThe IFA recommended Aviva it seemed based on his relationship with them that rang a few alarm bells as to whether they are the best option for my funds, which I wont be contributing into anymore, taking the minimum I can but need to see a good % growth as this pension combined needs to last me for 20 yrs plus given the transfer fee, annual charge (.75%) I want to make the right decision now as the L&G plan is stagnant. 

    And the performance .. over the last 12months Aviva hasn't performed as well as SJP 
    And the performance .. over the last 12months Aviva hasn't performed as well as SJP 

    It is the investments within the pensions that perform, if you had different investments within the Aviva pension, you would have got a different result.

    Dunstonh is an IFA, so will have different ( higher ) demands regarding the ease of use/flexibility of pension providers, in terms of website functionality etc
    This is what he means when he says Aviva is a budget option, it has no effect on the future performance of the pension, which ( as said already) is wholly dependent on what investments are held within the pension.
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