Virgin Money investments and pensions business is being sold to Octopus Money

GalacticaActual

I’ve just received a letter today to advise me that Virgin Money is selling their investments and pensions business to Octopus Money (I have a S&S ISA and Pension with Virgin Money).

This will only affect their Stocks and Shares ISAs, Investment Accounts and Pensions.

The sale of the investment business is due to happen early 2026.

Virgin Money’s website detailing more information.

A copy of the letter being circulated to all customers affected.

I believe Octopus Money and Octopus Energy are part of the same group.

This has come about because of the purchase of Virgin Money by Nationwide Building Society, according to the letter mentioned above.

Hattie627

As Oliver Hardie would have said, this looks like another fine mess.

The most recent similar event was the closure of Jarvis Investments' online platform X-O and the transfer of dealing and ISA account holdings to Interactive Investor. It didn't go entirely smoothly. 

I've never heard of Octopus Money. 

GalacticaActual

Hattie627 said:

I've never heard of Octopus Money. 

Yes, same here, never heard of them before.

I had a similar situation with a pension started with Nationwide Building Society in the early 2000s (via Legal & General).

Nationwide then handed it all to L&G who then passed it over to Jessop Fund Managers, then Capita, then Link Fund Solutions and now it’s with Waystone Management.

Although the transfers have gone smoothly, it’s still a worry, especially as I’ve built up quite large pension pots with all my pension providers.

masonic

Octopus have been doing investments longer than they have been doing energy supply. Octopus Money was only launched in 2023, but Octopus Investments and Octopus Ventures have been going a lot longer, the latter since about 2008. Was the first VCT manager to exceed £1bn of assets under management within its funds.

The first question to ask is why you have a S&S ISA and pension with Virgin Money. Aren't there already better options you could move to and not have to find out what this fairly new service is going to be like?

GalacticaActual

I initially set up a stakeholder pension with Virgin Money about 15 years ago with regular monthly investments between £25 and £100 and the odd lump sum along the way. It’s now worth circa £40,000.

The S&S ISA is relatively new so I’m thinking of moving that to another provider soon.

cloud_dog

Octopus Money investments (ISA, pension, etc) appear (?) to function on a 'managed' basis, unless I have misinterpreted their very brief spiel?  1.15% charges?

Albermarle

cloud_dog said:

Octopus Money investments (ISA, pension, etc) appear (?) to function on a 'managed' basis, unless I have misinterpreted their very brief spiel?  1.15% charges?

I briefly looked into them sometime ago, and from what I remember they seemed to be aimed more at the  wealth management area.

GalacticaActual

cloud_dog said:

Octopus Money investments (ISA, pension, etc) appear (?) to function on a 'managed' basis, unless I have misinterpreted their very brief spiel?  1.15% charges?

Virgin Money’s current charges are 0.75% each year, deducted monthly by selling units from my investments.

Lots to take in and think over now.

Thanks for everyone’s input.

jt666

I feel leaving a lump sum with a maxi Isa is a waste of time over the long run I had a matured PEP with £9K which sat with Virgin Maxi ISA for 30 odd years and the valuation after that time is less than if it sat at 3.5% in a Standard fixed rate ISA you would also have the benefit getting your money without waiting for markets to recover etc

The only time I think it makes sense to have a stocks and shares ISA is if you pay in a regular amount every month because then you buy some units at the top and some at the bottom of the market and it should beat fixed rate but the charges for management and the opportunity for stock cycling in and out of your investment pot for the benefit of stockbrokers will always drag down any potential to beat fixed rates let alone inflation

Just my opinion

masonic

jt666 said:

I feel leaving a lump sum with a maxi Isa is a waste of time over the long run I had a matured PEP with £9K which sat with Virgin Maxi ISA for 30 odd years and the valuation after that time is less than if it sat at 3.5% in a Standard fixed rate ISA you would also have the benefit getting your money without waiting for markets to recover etc

The only time I think it makes sense to have a stocks and shares ISA is if you pay in a regular amount every month because then you buy some units at the top and some at the bottom of the market and it should beat fixed rate but the charges for management and the opportunity for stock cycling in and out of your investment pot for the benefit of stockbrokers will always drag down any potential to beat fixed rates let alone inflation

Just my opinion

For those reading the above post after 2008, a Maxi ISA was the forerunner of today's S&S ISA and was aimed at individuals who wanted mainly to invest in S&S. It had a larger subscription limit than the then Mini Cash ISA (£4000 vs £3000).

As for the bit in bold, it looks pretty unjustifiable to me. Let's assume at the beginning of October 2007, at the top of the market, just before the global financial crisis of 2008-9, you invest a lump sum of £9k in an "average" global equity fund represented by the IA Global sector average. Today it would be worth about £33.5k - an annualised return of 7.6% per year. Or let's try a real fund that was around back then, the simple index tracker HSBC American Index. Then it would be worth £72k - an annualised return of 12.2% per year. Or even the humble UK index tracker HSBC FTSE All Share Index, which would represent a poor investment decision. £26k and 6%. None of those returns would have been achievable in a cash ISA over those 18 or so years (much of that period saw very low rates on cash). Even the poor option beat inflation by a comfortable margin.

Your issue seems to have been that you twinned an expensive legacy account with an expensive and poor investment choice. But you cannot conclude from that S&S ISAs are a waste of time for those holding investments long term and not making regular contributions. Back in the 2000s, you could hold low cost index trackers on a platform without further charge, albeit low cost in those days was about 1%. Then in the 2010s, Vanguard came to the UK and drove charges down well below 0.5%, albeit platforms started charging 0.25%-0.45% in fees, post-RDR. Then Vanguard launched its own platform charging 0.15% and dropped its fund fees down to 0.25% and less. More recently, others have taken over in the fee cutting, and today it is possible to invest with a fund fee of less than 0.1% and no other costs.

jt666

How has Virgin's UK share tracker fund performed in the last 17 years compared to the funds you have mentioned ?

I am not assuming anything by the way I am telling you how my investment with Virgin performed over the many years I have held it and giving my personal opinion not financial advice

I'm sure that there were better performing funds as you are illustrating in your commentary on my post

 I expect you chose to invest in one of those 

My IFA has retired now but the investments he selected for me didn't do much better they might have done with increased risk its a trade off I suppose

Perhaps I could have done with your expert advice at that time