USS pension fees more expensive than my Vanguard SIPP fees?

dllive

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.

ussdave

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

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

Wow! IB contributions have no management/platforms fees? That is quite cheap! 

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