Investing in funds via Aviva workplace pension?

MattMontreal

Hi all,

I have a workplace pension through Aviva, which, based on a helpful tip from someone on this forum, I’ve split into a decently-performing stock Aviva fund, one vanguard Europe tracker fund and one hsbc global tracker fund. 

Putting aside that money in a pension is different than an ISA: Would I benefit in terms of fees or any other way by having the vanguard and HSBC index funds with a dedicated cheap S&S ISA platform like iWeb etc and sticking with all Aviva for the pension? The rates for their own products look reasonable and it’s not clear to me whether carrying non-Aviva funds means I pay both the Aviva fee PLUS the fund's fee.

Does anyone have experience with this?

thanks!

Novice_investor101

It depends on what your aviva product is, they have a few different workplace pensions. They tend to offer their in-house funds for no additional charge to their platform AMC but there can be an additional fund cost for external funds. 

Their fund centre will clarify if additional charges apply. 

You’ll miss out on tax relief if you swap pension for ISA, or do you mean additional cash accumulated  separately to the pension in an ISA?

Qyburn

MattMontreal said:

Putting aside that money in a pension is different than an ISA: Would I benefit in terms of fees or any other way by having the vanguard and HSBC index funds with a dedicated cheap S&S ISA platform like iWeb etc and sticking with all Aviva for the pension? 

I guess you need to find out what the fees for each option actually are. There may be a third option, if your workplace pension allows partial transfers out you could move most of it to a new SIPP of your own choice.

It's hard to set aside the inherent differences though. Would any fee savings offset the 25% gain that you get immediately when funds go into a pension?

MattMontreal

Cheers for the replies. I’ve been on the fund centre and it clearly states that the fees are different for fund supermarket (non-Aviva) funds, but seemingly without saying what the end result would be for them. I think I need to just call them up. 

Great to know there’s not any other inherent potential disadvantage tho, besides, obv, pension vs ISA. In the end I’ll have both so it’s really a question of how things are split across them. If the Aviva fund performs slightly worse than the other two but has lower fees it could be easier to just go Aviva. 

dunstonh

If its one of their modern products, then the in-house range will be insured funds and typically fall within the auto-enrolment price cap and the external funds will be the UT/OEICs at the normal OCF for the share class.    It really depends on what pension you have with them.

MattMontreal

I’ve only been at that job half a year so presumably it’s a modern product. They refer to it as a Flexible Retirement Account. 

After a bit of digging, I found what looks like the fees brochure here:
https://static.aviva.io/content/dam/document-library/corporate-pensions/aengs606fra0.47.pdf

It appears that the Scheme Annual Charge is 0.47%/ year. The main Aviva fund is Future focus growth and lists an AMC of .100 while the HSBC FTSE All-World Index Fund is 0.12%, by the look of it. 

From that should I assume that total charges would be 0.57% and 0.59% for those two, respectively?

Albermarle

MattMontreal said:

I’ve only been at that job half a year so presumably it’s a modern product. They refer to it as a Flexible Retirement Account. 

After a bit of digging, I found what looks like the fees brochure here:
https://static.aviva.io/content/dam/document-library/corporate-pensions/aengs606fra0.47.pdf

It appears that the Scheme Annual Charge is 0.47%/ year. The main Aviva fund is Future focus growth and lists an AMC of .100 while the HSBC FTSE All-World Index Fund is 0.12%, by the look of it. 

From that should I assume that total charges would be 0.57% and 0.59% for those two, respectively?

Yes it would seem to infer that. The charges are a bit higher than you can get elsewhere, but not dramatically so.
It would matter more if your amount in the pension was quite large. For smaller amount the charges are not going to make a lot of difference.

MattMontreal

I guess i can look at it that even if the rates are higher than elsewhere, a large share of what’s  in there will have come from my employer, so that’s something.