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Annual Management Charge?
njhedley83
Posts: 1 Newbie
Hello all.
I am looking at starting a stakeholder pension, paying by commission. After getting some illustrations from various IFAs (free of charge, of course), I have figured out which pension I want. I have since been looking at using a pension discount brokers, in order to save some money. If I were to use Cavendish Online, for example, I would only have to pay £25/35 to set up the pension, and the rest of what would have gone on commission goes into my pension fund (i.e. a nice saving of a few hundred quid). However, I am slightly confused about the Annual Management Charge. They are saying it is only 0.65% with them, when it is normally 1% - 1.5% - thus another cost saving. But, who normally charges me the Annual Management Charge?? i.e. when I use the IFA route. Is it yet another charge that is taken out of fund when I pay by commission?
HELP!
I am looking at starting a stakeholder pension, paying by commission. After getting some illustrations from various IFAs (free of charge, of course), I have figured out which pension I want. I have since been looking at using a pension discount brokers, in order to save some money. If I were to use Cavendish Online, for example, I would only have to pay £25/35 to set up the pension, and the rest of what would have gone on commission goes into my pension fund (i.e. a nice saving of a few hundred quid). However, I am slightly confused about the Annual Management Charge. They are saying it is only 0.65% with them, when it is normally 1% - 1.5% - thus another cost saving. But, who normally charges me the Annual Management Charge?? i.e. when I use the IFA route. Is it yet another charge that is taken out of fund when I pay by commission?
HELP!
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Comments
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But, who normally charges me the Annual Management Charge?? i.e. when I use the IFA route. Is it yet another charge that is taken out of fund when I pay by commission?
Have a look at the charges breakdown on the FSA's website:
https://www.fsa.gov.uk/tables
The AMC is charged by the insurance company ( or fund manager in a Sipp) every year and comes out of your fund.The commission comes under the "charges in early years".Sad to say the effect of charges over the life of the fund is to eat away 25% of it
If you are a basic rate taxpayer with no company pension offering free money,you would be better off saving in a stocks and shares ISA than in a pension.The ISA is a "use it or lose it" annual allowance, whereas the pension tax perk can be accessed much later in life, perhaps when you are a higher rate taxpayer, at which point pensions become a MUCH better deal.Trying to keep it simple...
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