Scottish Widows Stakeholder Pension

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Going direct to Scottish Widows for their stakeholder pension incures a 1% annual charge. However if you apply online with them you will get a 20% discount on the "annual fund charge" for the term of the contract.

http://www.scottishwidows.co.uk/individual_pensions/stakeholder_pensions/in_detail.html

if I buy the same pension through Hargreaves Lansdown the AMC is 0.78%.

http://www.h-l.co.uk/pensions_and_retirement/stakeholder_pensions_apply_now.hl

I'm confused. Which one of these offers the best (long term) deal?

Thanks for any advice.

dunstonh

The SW stakeholder is rubbish. Their personal pension is better as it has all the funds of the stakeholder plus more.

HL is better than buying direct but Cavendish is better than HL. Clerical Medical , Scot Life and Scot Eq and possibly NU through an IFA is probably even cheaper. L&G is cheaper than SW.

Are you investing for retirement to obtain real capital growth or are you looking to save 0.1% or so on annual charges?

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dunstonh wrote: »

Are you investing for retirement to obtain real capital growth or are you looking to save 0.1% or so on annual charges?

dunstonh, I'll take the first option please!

I was under the impression that a stakeholder pension was the cheaper option but I can see now the range of funds is tiny compared Personal Pension plans.


If you're not going to get any growth than there is not much point saving 0.1% in annual charges....

Thanks.

dunstonh

I was under the impression that a stakeholder pension was the cheaper option but I can see now the range of funds is tiny compared Personal Pension plans.

It was when it first came out but personal pensions changed and they can come in cheaper. You can get as low as 0.3% p.a. charges on a personal pension on nil commission. Even on full commission with some providers you can get 0.6% on a PPP.

Many of the PPPs offer the same funds at the same charges as the stakeholder but also loads of external funds as well.

If you're not going to get any growth than there is not much point saving 0.1% in annual charges....

To put that 0.1% p.a. in context, the FTSE100 was up just over 0.5% today. The investment side should be your priority. Then choice of provider and the charges. Some of the best investments in recent years have been the more expensive ones (emerging markets, china etc). Whilst you wouldnt go 100% into those, a diverse portfolio that averages out to match your risk profile utilising the best of the stakeholder funds (usually at the lower risk end) and the best of the external funds (usually equities) is the best option.