Standard Life Costs and charges Cap?

vienly

Hello, I can't seem to find the answer on their website so thought I'd ask here.
Does anyone know if Standard Life have a 'costs and charges' cap, for when the pension is moved into Drawdown?

At the moment I seem to get 0.810% discount (though work place agreement) which means at the moment I pay 0.207% in total fund charges. I am going to assume my discount stops when I retire.

I understand they have 'Total Annual Fund Charg' but it does not specify if there is a cap?
https://www.standardlife.co.uk/charges

If for example I had £1m in my pension within SL, and they charged 1% a year, that would be £10k a year just in fees, seems crazy?

p00hsticks

I can't see a cap - the interest rate charged depends both on the fund and how much you have invested. 

vienly

p00hsticks said:

I can't see a cap - the interest rate charged depends both on the fund and how much you have invested. 

So in theory they could be charging £10k a year, depending on size of pot? 

vienly

oh I just found this, wow....

https://www.which.co.uk/news/article/revealed-the-true-cost-of-pension-drawdown-a5EiJ1r72tfM

jamesd

I have a similar deal with SL. I already have a HL account and transfer some money to that periodically for drawing down. That leaves the SL bit on the original charges and me paying HL too little to matter.

dunstonh

Does anyone know if Standard Life have a 'costs and charges' cap, for when the pension is moved into Drawdown?

There is no cap on charges apart from auto-enrolment schemes.

If for example I had £1m in my pension within SL, and they charged 1% a year, that would be £10k a year just in fees, seems crazy?

That may not be crazy as its depends on what you invest in.

vienly

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% which would be £10k a year just in fees, however looking at HL they have a cap of just 0.45% (capped at £200 per year), am I looking at this wrong?

£10k vs £200 a year

https://www.hl.co.uk/pensions/sipp/charges-and-interest-rates

I assume Vanguard has similar:
0.15% per year  (Capped at £375 per year for accounts over £250,000)

That's still way cheaper than SL

Would it make sense to once retired, transfer my pension to a SIPP in either HL or Vanguard to save on fees?

Albermarle

At the moment I seem to get 0.810% discount (though work place agreement) which means at the moment I pay 0.207% in total fund charges. I am going to assume my discount stops when I retire.

AFAIK , they are not allowed to do that anymore and the discount will continue. However probably you have a older version and will have to change to a newer SL pension. I think at that point you may have to negotiate.

In any case it will not be 1% as they have standard discounts for larger pots.

Albermarle

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% which would be £10k a year just in fees, however looking at HL they have a cap of just 0.45% (capped at £200 per year), am I looking at this wrong?

£10k vs £200 a year

https://www.hl.co.uk/pensions/sipp/charges-and-interest-rates

I assume Vanguard has similar:
0.15% per year  (Capped at £375 per year for accounts over £250,000)

That's still way cheaper than SL

Would it make sense to once retired, transfer my pension to a SIPP in either HL or Vanguard to save on fees?

If you only invest in ETF's or Investments trusts then HL caps charges at £200 per year: AJ Bell at £120 and Fidelity at £90.
However if you were to mainly invest in OEIC funds ( as most people do) then SL would  work out cheaper, especially if you could keep that 0.8% discount.

Of course your retirement investment strategy for a £1M pot, should not bedriven solely by charges !

vienly

Albermarle 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% which would be £10k a year just in fees, however looking at HL they have a cap of just 0.45% (capped at £200 per year), am I looking at this wrong?

£10k vs £200 a year

https://www.hl.co.uk/pensions/sipp/charges-and-interest-rates

I assume Vanguard has similar:
0.15% per year  (Capped at £375 per year for accounts over £250,000)

That's still way cheaper than SL

Would it make sense to once retired, transfer my pension to a SIPP in either HL or Vanguard to save on fees?

If you only invest in ETF's or Investments trusts then HL caps charges at £200 per year: AJ Bell at £120 and Fidelity at £90.
However if you were to mainly invest in OEIC funds ( as most people do) then SL would  work out cheaper, especially if you could keep that 0.8% discount.

Of course your retirement investment strategy for a £1M pot, should not bedriven solely by charges !

Thanks, I know it shouldn't be entirely charges driven but the cost seems like a real slap in the face. 
I guess moving it once retired seems like a no brainier, if investing in etfs like you said. 

Albermarle

vienly said:

Albermarle 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% which would be £10k a year just in fees, however looking at HL they have a cap of just 0.45% (capped at £200 per year), am I looking at this wrong?

£10k vs £200 a year

https://www.hl.co.uk/pensions/sipp/charges-and-interest-rates

I assume Vanguard has similar:
0.15% per year  (Capped at £375 per year for accounts over £250,000)

That's still way cheaper than SL

Would it make sense to once retired, transfer my pension to a SIPP in either HL or Vanguard to save on fees?

If you only invest in ETF's or Investments trusts then HL caps charges at £200 per year: AJ Bell at £120 and Fidelity at £90.
However if you were to mainly invest in OEIC funds ( as most people do) then SL would  work out cheaper, especially if you could keep that 0.8% discount.

Of course your retirement investment strategy for a £1M pot, should not bedriven solely by charges !

Thanks, I know it shouldn't be entirely charges driven but the cost seems like a real slap in the face. 
I guess moving it once retired seems like a no brainier, if investing in etfs like you 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