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  • FIRST POST
    • DrHyde
    • By DrHyde 7th Feb 18, 3:23 PM
    • 5Posts
    • 2Thanks
    DrHyde
    L&G Stakeholder Pension Plan
    • #1
    • 7th Feb 18, 3:23 PM
    L&G Stakeholder Pension Plan 7th Feb 18 at 3:23 PM
    Hi All,
    6 years ago when I didn't have a workplace pension I set up a stakeholder pension plan with L&G. I stopped paying into it a year or so later as I figured it was too expensive but never reviewed it.
    I now found that I have 17k or so invested in it but find Annual Management Charges (AMC) at 1.5% quite steep. I think fund charges come on top of it still.
    I consider moving this into a SIPP held with BestInvest and invest exclusively in one of their Vanguard Target Retirement Funds. That's an AMC of just under 0.6% (for platform AND fund). I don't intend to put money in it just now as I have a LISA and workplace pension, too. (I could transfer into workplace pension but their AMC is higher than that of BestInvest for platform only - not a great choice of funds.)
    I understand the risks of "all eggs in one basket" etc but wonder if that's a reasonable approach in your views? Any ideas of what might be better still much appreciated.
    Also: Vanguard Investor have told me that they'll offer a SIPP later this year, too - the precise proposition is still to be confirmed. Would you wait for their release rather than opting for BestInvest?
    Thank you,
    Tom
Page 1
    • dunstonh
    • By dunstonh 7th Feb 18, 3:56 PM
    • 92,660 Posts
    • 59,985 Thanks
    dunstonh
    • #2
    • 7th Feb 18, 3:56 PM
    • #2
    • 7th Feb 18, 3:56 PM
    I stopped paying into it a year or so later as I figured it was too expensive but never reviewed it.
    Stakeholder pensions were the low cost option in 2001. By around 2006, they were being beaten on price by personal pensions.

    I now found that I have 17k or so invested in it but find Annual Management Charges (AMC) at 1.5% quite steep.
    That is around 5 times higher than modern plans. 0.4% all in is more typical nowadays.

    I think fund charges come on top of it still.
    no they dont.

    consider moving this into a SIPP held with BestInvest and invest exclusively in one of their Vanguard Target Retirement Funds.
    Not a great fund. It is very niche and unsuitable for most. Why do you want it?

    Also: Vanguard Investor have told me that they'll offer a SIPP later this year, too - the precise proposition is still to be confirmed. Would you wait for their release rather than opting for BestInvest?
    Single tied products offering own funds are cheap. You can already get them at 0.28% all in. With Vanguards fund charges, that means the SIPP charge is going to have to be damned low. Lower than anything else in the market place.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • DrHyde
    • By DrHyde 7th Feb 18, 4:04 PM
    • 5 Posts
    • 2 Thanks
    DrHyde
    • #3
    • 7th Feb 18, 4:04 PM
    • #3
    • 7th Feb 18, 4:04 PM
    Thank you for your reply!

    Not a great fund. It is very niche and unsuitable for most. Why do you want it?
    In my view it's a no-nonsense product that is adjusted to safer investments as I reach retirement in 2050 or so. Sounds sensible to me. No?

    You can already get them at 0.28% all in.
    What platform is this with?

    Thank you again!
    • AlanP
    • By AlanP 7th Feb 18, 7:45 PM
    • 1,182 Posts
    • 851 Thanks
    AlanP
    • #4
    • 7th Feb 18, 7:45 PM
    • #4
    • 7th Feb 18, 7:45 PM
    Thank you for your reply!



    In my view it's a no-nonsense product that is adjusted to safer investments as I reach retirement in 2050 or so. Sounds sensible to me. No?



    What platform is this with?

    Thank you again!
    Originally posted by DrHyde
    It is adjusted to lower volatility assets as you approach chosen age but do you intend to take it all out on that date or do you plan on leaving it invested?

    Most would be leaving their pension invested past retirement date and drawing it down over a period of time.
    • dunstonh
    • By dunstonh 7th Feb 18, 9:34 PM
    • 92,660 Posts
    • 59,985 Thanks
    dunstonh
    • #5
    • 7th Feb 18, 9:34 PM
    • #5
    • 7th Feb 18, 9:34 PM
    In my view it's a no-nonsense product that is adjusted to safer investments as I reach retirement in 2050 or so. Sounds sensible to me. No?
    It starts with a higher risk than the typical UK consumer. It starts to de-risk very early and ends up lower risk than the typical UK consumer. You also pay a slightly higher charge in the process. And statistically, you are likely to end up with a lower value in the majority of time periods. If you happen to fit the risk profiles exactly then fair enough. Most people will not.

    What platform is this with?
    The DIY market hasnt got many single tied providers. Vanguard will be one of a few. I was thinking more about the advice side where there are still a number of tied product providers. Although they are becoming less common.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • DrHyde
    • By DrHyde 8th Feb 18, 11:43 AM
    • 5 Posts
    • 2 Thanks
    DrHyde
    • #6
    • 8th Feb 18, 11:43 AM
    • #6
    • 8th Feb 18, 11:43 AM
    Thank you both,
    I'll look into other Lifestyle funds that might be available on BestInvest. There will be competitors to Vanguard Target Retirement 20XX.
    For the time being I suppose BestInvest is the best platform.
    Thanks again, DH
    • dunstonh
    • By dunstonh 8th Feb 18, 12:21 PM
    • 92,660 Posts
    • 59,985 Thanks
    dunstonh
    • #7
    • 8th Feb 18, 12:21 PM
    • #7
    • 8th Feb 18, 12:21 PM
    There will be competitors to Vanguard Target Retirement 20XX.
    not many. Many providers have been pulling their lifestyling funds following feedback from the FCA on concerns about their suitability. Some have been repackaging them to target certain draw methods (target annuity, target drawdown, target full withdrawal etc)

    You need to ask yourself if you actually need lifestyling risk reduction. Most people do not.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • AlanP
    • By AlanP 8th Feb 18, 12:52 PM
    • 1,182 Posts
    • 851 Thanks
    AlanP
    • #8
    • 8th Feb 18, 12:52 PM
    • #8
    • 8th Feb 18, 12:52 PM
    not many. Many providers have been pulling their lifestyling funds following feedback from the FCA on concerns about their suitability. Some have been repackaging them to target certain draw methods (target annuity, target drawdown, target full withdrawal etc)

    You need to ask yourself if you actually need lifestyling risk reduction. Most people do not.
    Originally posted by dunstonh
    I think that last point is the key - do you need that feature?


    We have an AVC running alongside a DB scheme. The AVC will pay out, in cash, at the point we take the DB pension i..e a fixed point in time. In this scenario it makes sense for us to "lifestyle" the pot so that it is exposed to less volatile assets the closer the date gets.

    We also have a SIPP that will be drawn from as and when required, maybe over a 20-40 year time-frame (hopefully closer to 40). It makes no sense in this scenario to "lifestyle" the investment as there is an ongoing need not a fixed point need.
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