USS pension fees more expensive than my Vanguard SIPP fees?

Hi all,

Im employed, and also have self employed income. So I pay into my USS pension scheme and a SIPP (Vanguard's LifeStrategy100, held on the Vanguard platform).

At the moment, I pay about 80% of my employed income into USS; and 5% of my self-employed income into my SIPP. No rhyme or reason for this ratio, its just happened that way. :)

I seem to remember somewhere reading that USS charges are quite high.

So is worth swapping that ratio: so perhaps 80% of my self-employed income goes into my SIPP; and 5% of my employed incomes goes into USS (as AVCs).

Does that sound reasonable? I know there are other benefits to having a USS pension (I think I can take more out tax free as a cash payment or something?). Possibly - on a fees basis alone - it makes sense to pay more into my SIPP rather than USS, but Im not sure, and also not sure if there are more benefits paying more into USS.

BTW I have about 15 years before - hopefully - retiring.

Any advice/opinions gratefully received. :)

Comments

  • ussdave
    ussdave Posts: 306 Forumite
    First Anniversary First Post Name Dropper
    edited 19 January at 2:36PM
    If you read the other recent thread re USS you can get an idea of the tax benefits of having a fairly hefty amount in your USS Investment Builder.  

    Regarding fees, the USS fees are 0% as long as you fund the pension through your salary as they are paid for by the employers.  Money transferred in is not however.  Edit: This isn't quite right.  See page ~20 here: https://www.uss.co.uk/-/media/project/ussmainsite/files/for-members/guides/a-guide-to-investing-in-the-investment-builder.pdf

    I'm not an expert on this, but there may be better tax options due to your self-employment.  Someone more knowledgeable on that will need to comment though.
  • swindiff
    swindiff Posts: 863 Forumite
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    USS charges for Investment Builder contributions from salary are zero, can't get much lower than that.  Even transfers in are only 0.1% to 0.3% depending on the fund you are invested in, so still pretty low.
  • dllive
    dllive Posts: 1,225 Forumite
    First Post Name Dropper First Anniversary I've been Money Tipped!
    Wow! IB contributions have no management/platforms fees? That is quite cheap!  :smile:

    Ill have a look at the other recent USS thread. Thanks guys!
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