Stakeholder Pension versus Personal Pension

Murphy_The_Cat

Pleas excuse me if this question has been asked before - in Laymans terms, what are the major difference between the two products ?

I'm asking for a fairly particular reason. I have started a SH for both by young son and my baby daughter (I am an on the job, self educating investor ) and I've found that the choice of funds that are available to me with Legal & General are as bland as diluted vanilla- and the choices of external funds area also in various shades of blandness.

Is it a flight of fancy for me to think that I could transfer the existing SH pensions into a PP, especially one that had a range of funds available that included a touch of excitement/risk to them, as the current L&G SH selection leaves me fairly cold.

jem16

Basically the stakeholder pension is cheaper and has fewer funds to choose from, mostly internal.

A personal pension will allow a choice of internal and external funds but will of course be dearer. However you could mix some of the cheaper funds with the dearer external funds, thereby getting a good range but not too exoensive.

I have a personal pension with Scottish Widows whcih offers a very good range of funds.

http://www.scottishwidows.co.uk/individual_pensions/personal_pensions/index.html

You are allowed to choose 10 funds.

Murphy_The_Cat

jem16 wrote: »

Basically the stakeholder pension is cheaper and has fewer funds to choose from, mostly internal.

A personal pension will allow a choice of internal and external funds but will of course be dearer. However you could mix some of the cheaper funds with the dearer external funds, thereby getting a good range but not too exoensive.

I have a personal pension with Scottish Widows whcih offers a very good range of funds.

http://www.scottishwidows.co.uk/individual_pensions/personal_pensions/index.html

You are allowed to choose 10 funds.

Just what I was looking forward to hearing :beer:. I've also got a PP with SW and the wide choice of funds is very attractive to me (but others offer an even wider range). I'm not to concerned at paying higher charges, as long as the higher charges are representing better performing funds (not always the case, but you know what I mean ).
The stumbling block for me may be the minimum investments each month.
mmmm, food for thought.

dunstonh

I'm not to concerned at paying higher charges, as long as the higher charges are representing better performing funds (not always the case, but you know what I mean ).

That is the perfect mindset to have and one I keep saying on here. If you utilise the options then its money well spent. If you dont, then its a waste.

Also, most people are generally cautious investors. The stakeholder charged funds can offer very good value at the low risk end of the scale and a portfolio mixing and matching stakeholder and personal pension funds can give a very good spread with a balance between costs and potential returns.

Most PPPs tend to have a minimum premium of £100pm (gross). £80pm net.

Murphy_The_Cat

dunstonh wrote: »

That is the perfect mindset to have and one I keep saying on here. If you utilise the options then its money well spent. If you dont, then its a waste.

Also, most people are generally cautious investors. The stakeholder charged funds can offer very good value at the low risk end of the scale and a portfolio mixing and matching stakeholder and personal pension funds can give a very good spread with a balance between costs and potential returns.

Most PPPs tend to have a minimum premium of £100pm (gross). £80pm net.

Yeah, the £100 pm gross is the figure that I'll have to work with. My thoughts are that If I can invest wisely and successfully for my children for the first 20 years of their pension, then the remaining 40 years should be a lot easier/happier for them. This is why I'm prepared to be aggressive with their VERY long term pensions.

Another query that I have is with the user friendlyness of different pension providers online services. I find that the SW website is very poor in telling me how each fund has performed in the respect that I can't get either a percentage growth/or loss, nor a financial gain/loss, just the specific fund value and a total fund value, plus, they don't have many 'spicy' funds.

Could anyone point me in the right direction of a 'quality' private pension provider, that has a large range of funds (including some spicy ones ), that will take a £100pm contribtion and who has a online service for me to monitor the performance of individual funds, within my childrens pension set up ? From my quick research, Skandia seem to have about 500 funds for me to go at, & Trustnet give them 5 stars for online performance, would they fit the bill ?

dunstonh

I find that the SW website is very poor in telling me how each fund has performed in the respect that I can't get either a percentage growth/or loss, nor a financial gain/loss, just the specific fund value and a total fund value, plus, they don't have many 'spicy' funds.

Scottish Widows use morningstar as their factsheet providers. The data is on their site but not in the personal details area.

From my quick research, Skandia seem to have about 500 funds for me to go at,

They have merged with Selestia and the Selestia contract is better than the Skandia one(s). I fully expect them to close the Skandia ones for new business some time soon. They are moving the Skandia online tools onto the Selestia platform. Some are already there.

Murphy_The_Cat

dunstonh wrote: »

Scottish Widows use morningstar as their factsheet providers. The data is on their site but not in the personal details area.
They have merged with Selestia and the Selestia contract is better than the Skandia one(s). I fully expect them to close the Skandia ones for new business some time soon. They are moving the Skandia online tools onto the Selestia platform. Some are already there.

I think that I've been a bit muddled in what I've been talking about .
What I'm after knowing is that I've invested (say) £1200 into SW Fid European units, that these units are now worth (say) £1325, which then shows the Sterling gain & the percentage gain/loss, extended down to show how the whole pension pot has performed.
Is this something that Selestia/Skandia would offer ?

dunstonh

What I'm after knowing is that I've invested (say) £1200 into SW Fid European units, that these units are now worth (say) £1325, which then shows the Sterling gain & the percentage gain/loss, extended down to show how the whole pension pot has performed.
Is this something that Selestia/Skandia would offer ?

It is at adviser level. I am not sure if it is yet available at consumer level. I believe the Skandia version does already.

However, Selestia use unit trust funds whereas Skandia use personal pension funds. So, you can use many of the external software programs like MS Money or web based versions like Morningstar to put your holdings in there. A SIPP would allow you to use unit trust funds as well. That software will then have a range of reporting options available to you.

Murphy_The_Cat

dunstonh wrote: »

It is at adviser level. I am not sure if it is yet available at consumer level. I believe the Skandia version does already.

However, Selestia use unit trust funds whereas Skandia use personal pension funds. So, you can use many of the external software programs like MS Money or web based versions like Morningstar to put your holdings in there. A SIPP would allow you to use unit trust funds as well. That software will then have a range of reporting options available to you.

I'm unsure about taking the SIPP option (can I even do it for children ?) as from my research, I can see that a lot of people take up a SIPP (because its a sexy new product ?) but only use it to invest in the same funds that they could/would have done in a PP, the only difference being that the charges are higher.
Am I on the correct wavelength ?

EdInvestor

For your requirements a SIPP would be better, for the online functionality and choice of funds.For quality funds, you shouldn't find a low cost online SIPP any more expensive than a PP. The customer service is also streets ahead.

https://www.h-l.co.uk if you want mainly unit trusts
https://www.sippdeal.co.uk if you want mainly shares/gilts/ETFs/ITs

Murphy_The_Cat

EdInvestor wrote: »

For your requirements a SIPP would be better, for the online functionality and choice of funds.For quality funds, you shouldn't find a low cost online SIPP any more expensive than a PP. The customer service is also streets ahead.

www.h-l.co.uk if you want mainly unit trusts
www.sippdeal.co.uk if you want mainly shares/gilts/ETFs/ITs

am I correct in thinking that H-L would be looking at a minimum of £50 per fund
, per month, whereas with a PP I could invest much smaller mounts over a lot more funds, as long as the minimum was £100pm, gross.? I'm happier with the idea of mainly units, rather than shares/gilts/ETFs/ITs.