Standard Life Costs and charges Cap?

dunstonh

Remember that 
a)  auto-enrolement schemes cannot increase their charges once you leave employment
b) SL haven't issued a pension with a 1% AMC on internal funds for over a decade.    (1st Jan 2013 with RDR - even then, most of them were ready for RDR years beforehand).
c) ETFs are considered an advanced investment option.  They don't get FSCS protection and are not aimed at the average or basic consumer.   As, they don't have to pay towards consumer protection, that is partly what makes them cheaper.  Pension funds, on the other hand, get 100% FSCS protection with no upper limit and that creates an additional cost to the consumer.  

vienly

Albermarle said:

A well known global index tracker ETF is VWRL - charge is 0.22% . Platform charge could be peanuts.
However with a 0.81% discount with SL, you could have an index tracker for less than 0.22%, so not a no brainer.
SL will not want to lose a big customer. I had a 0.5% discount with SL for a smaller pension fund ( ex employer pension) All I had to do was to mention Vanguard, Fidelity etc and they increased the discount to 0.65%
I would guess you can keep this 0.81% discount (or similar).
Most people on the forum with £1M pots or similar tend to split it over two ( or three ) providers, in case of IT issues, to monitor customer service experiences etc 

Thanks, I didn't know that you could negotiate costs with pension providers.

I'm not sure if the discount still applied after retirement, but looks like dunstonh has mentioned the costs doesn't go up, so maybe costs will stay the same for when retirement comes.

vienly

dunstonh said:

Remember that 
a)  auto-enrolement schemes cannot increase their charges once you leave employment
b) SL haven't issued a pension with a 1% AMC on internal funds for over a decade.    (1st Jan 2013 with RDR - even then, most of them were ready for RDR years beforehand).
c) ETFs are considered an advanced investment option.  They don't get FSCS protection and are not aimed at the average or basic consumer.   As, they don't have to pay towards consumer protection, that is partly what makes them cheaper.  Pension funds, on the other hand, get 100% FSCS protection with no upper limit and that creates an additional cost to the consumer.  

a) thank you i didn't know that, makes a huge difference if that is the case.
b) 1% did seem high, although it appears they still charge it, but gives discounts, according to my one that is anyways

c) was considering leaving the pension fund in something VWRP, but will look at a retirement fund in that case if it isn't protected.

jamesd

You're probably getting extra units every month to deliver your discount. Mine continued into retirement but I haven't asked about after drawdown.

VWRP gets the full FSCS protection for non-pension investments: nothing on ordinary losses but 85k for fraud and such, where pension specific get unlimited. All Vanguard funds you hold anywhere share that 85k.

Funds are in trust so the actual chance if non-investment loss is low. If using trackers it's often easy to diversify across different brands but the non-SIPP SL product doesn't offer enough to do that with a million.

Albermarle

vienly said:

dunstonh said:

Remember that 
a)  auto-enrolement schemes cannot increase their charges once you leave employment
b) SL haven't issued a pension with a 1% AMC on internal funds for over a decade.    (1st Jan 2013 with RDR - even then, most of them were ready for RDR years beforehand).
c) ETFs are considered an advanced investment option.  They don't get FSCS protection and are not aimed at the average or basic consumer.   As, they don't have to pay towards consumer protection, that is partly what makes them cheaper.  Pension funds, on the other hand, get 100% FSCS protection with no upper limit and that creates an additional cost to the consumer.  

a) thank you i didn't know that, makes a huge difference if that is the case.
b) 1% did seem high, although it appears they still charge it, but gives discounts, according to my one that is anyways

c) was considering leaving the pension fund in something VWRP, but will look at a retirement fund in that case if it isn't protected.

I think Dunstonh is mainly familiar with the SL pensions that are designed for financial advisors. You are right that the retail pension's standard funds are mainly charged at 1%, then with discounts.

I am sure if you left your employer the 0.81% discount would continue. The issue might be when you want to start drawdown. If it is an older pension started some years ago, it might not be suitable for drawdown ( old software etc). If so SL will offer to transfer you over to one of their modern pensions for drawdown. You would have to get clarity from them that the discount would still apply .

p00hsticks

vienly said:

Say for example I carried on investing in a Vanguard all world ETF (whatever the equivalent is in SL) and it was £1m. SL would charge 1% ....

Where are you getting that 1% figure from ? 
My SL charges are nowhere near that percentage, with a considerably smaller pot, as the base charges are quite heavily discounted. I assume that the discount applied increases the higher the amount (and as I said in my initial post, the exact charge will depend both on the fund and how much is invested in it)  

Rich1976

I have a Standard Life work place pension and the only fund which is discounted is the default Sustainable Multi Asset Growth fund, which I pay 0.63% for. 

There are other funds available to me at a similar charge but tend to be variations or similar to the same fund.
all the other 300 funds I have access to charge in the region of 1-2%. The 1% are tracker funds incredibly. 

I checked with them on 2 separate occasions whether the trackers are eligible for a discount and both times I was told no, it is 1% plus the transaction fee of about 0.02-0.03%

so it seems very much with SL, the fees someone pays depends what their employer has negotiated.

according to their website this morning, somebody can take out the SL Active Money Purchase pension and if they select the same default fund, they would pay 0.70% under £25000 and 0.50% for funds valued at over 25k.

the other funds attract a 50% discount over 25k which would bring the minimum charges down to 0.50% so would be cheaper than my workplace pension but of course doesn’t get the employer contribution so I’m stuck on the higher charge.

vienly

p00hsticks said:

vienly said:

Say for example I carried on investing in a Vanguard all world ETF (whatever the equivalent is in SL) and it was £1m. SL would charge 1% ....

Where are you getting that 1% figure from ? 
My SL charges are nowhere near that percentage, with a considerably smaller pot, as the base charges are quite heavily discounted. I assume that the discount applied increases the higher the amount (and as I said in my initial post, the exact charge will depend both on the fund and how much is invested in it)  

Checking with SL directly and my employer documents, it appears the discount still continues when I go into retirement which I guess is good news, but still seems higher than the likes of Vanguard platform.

vienly

Rich1976 said:

I have a Standard Life work place pension and the only fund which is discounted is the default Sustainable Multi Asset Growth fund, which I pay 0.63% for. 

There are other funds available to me at a similar charge but tend to be variations or similar to the same fund.
all the other 300 funds I have access to charge in the region of 1-2%. The 1% are tracker funds incredibly. 

I checked with them on 2 separate occasions whether the trackers are eligible for a discount and both times I was told no, it is 1% plus the transaction fee of about 0.02-0.03%

so it seems very much with SL, the fees someone pays depends what their employer has negotiated.

according to their website this morning, somebody can take out the SL Active Money Purchase pension and if they select the same default fund, they would pay 0.70% under £25000 and 0.50% for funds valued at over 25k.

the other funds attract a 50% discount over 25k which would bring the minimum charges down to 0.50% so would be cheaper than my workplace pension but of course doesn’t get the employer contribution so I’m stuck on the higher charge.

Maybe it is employer specific, but I was on the same fun 'Sustainable Multi Asset Growth fund' but had a discount on there, I moved over to 'SL Vanguard US Equity Pension Fund' and the discount still applied.
But my employer documents suggested I was able to change funds, which I assume meant the discount also applied.

dunstonh

vienly said:

p00hsticks said:

vienly said:

Say for example I carried on investing in a Vanguard all world ETF (whatever the equivalent is in SL) and it was £1m. SL would charge 1% ....

Where are you getting that 1% figure from ? 
My SL charges are nowhere near that percentage, with a considerably smaller pot, as the base charges are quite heavily discounted. I assume that the discount applied increases the higher the amount (and as I said in my initial post, the exact charge will depend both on the fund and how much is invested in it)  

Checking with SL directly and my employer documents, it appears the discount still continues when I go into retirement which I guess is good news, but still seems higher than the likes of Vanguard platform.

1.00 is the equivalent of the OCF.  0.017 is the TC.   Most people ignore TC.     The discount brings it to 0.0207% including TC or 0.20% without TC.

With Vanguard platform being 0.15%, you would need a Vanguard fund with an OCF of less than 0.05% to be cheaper.