StakeHolder pension charges

mr._prude

Hi all

I have read Martins article about trying to effectively re-pension to try and reduce the annual charges. I thought I was being charged 1% per year of my pension value and that I may be able to reduce this down to 0.6% per year. I didn't know the government cap on charges had been increased from 1 to 1.5% so I thought I would check my last pension statement and do a little maths and find out exactly what I am being charged.

On doing the maths
monthly charge / current fund value x 100 for a monthly percent
x12 to get a approximate yearly percent
the value turn out at 2.76% per year and not 1%

I have emailed Friend provident to query this but it does seem to be over the governments cap.

Mr. P

DavidLaGuardia

A personal pension, in theory, can have any charges. If it is a stakeholder it must stick to within 1.5% for the first 10 years and 1% thereafter (although some still offer the 1% throughout) but not all personal pensions are stakeholder

mr._prude

This is definitely a Stake holders pension. It will be interesting to find out how FP explains these charges.

Thanks
Mr.P

ReportInvestor

hi mr._prude

I obviously don't know the ins and outs of your particluar case, BUT try clicking on this link below

A 1.5% cap on charges does NOT mean that your fees are capped at 1.5% :mad:

The evidence suggests that there is plenty of leeway for any company to add an extra 1% (or more) to your bill without anyone making too much fuss :eek: .

It is vital that investors are able to view the TER (Total Expense Ratio) as advocated by Fitzrovia. Stephen Wynn argues that stakehoder products are a "charter for churners", as investment management companies take their extra cut at your expense.

DavidLaGuardia

ReportInvestor wrote:

It is vital that investors are able to view the TER (Total Expense Ratio) as advocated by Fitzrovia. .

Absolutely spot on! TERs show the true costs of a fund. It is true however that the contractual charges being reduced as a result of stakeholder have made things genuinely cheaper as the dealing costs contributing to the TER were there anyway in most cases.