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Switching from a stakeholder pension worth it?
CGT/Dividend Tax Obsessive
Posted: 26 April 2018 20:04:57(UTC)
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Hi all,

I've got an L&G stakeholder pension with about £110k in it. I plan to top it up to about £190k this year.

At the moment the stakeholder pension is entirely invested in the 'L&G International Fund' and looks to be charging about 1% per year.

Especially when I get up towards £200k, this 1% seems a decent whack of money, especially when my S&S ISAs only cost about 0.21% with the platform and fund fees.

Is it worth me switching over to something cheaper? Maybe a SIPP? I don't want to do anything creative or exciting, just put my money in sensible passive trackers with the lowest fees possible and leave it there for decades (I'm 36). Should it be fairly easy/free to transfer over? Is there a flat charge pension that's recommended?

Thanks
Tim D
Posted: 26 April 2018 20:18:52(UTC)
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Yes do it your future self will thank you... even fractions of a percentage savings over pension saving timescales make a huge difference - could turn out to be the easiest £100K you make for a few hours work... wish I'd made the move years earlier than I actually did myself.

List of brokers at http://monevator.com/com...heapest-online-brokers/ is a good starting point for researching where you might go (yes it's a SIPP you're looking for).

Think most platforms offer free transfers in these days, and you should find their "new business" people extremely helpful... they want your money!
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CGT/Dividend Tax Obsessive on 26/04/2018(UTC)
Joe 90
Posted: 26 April 2018 20:35:55(UTC)
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Moved my pension to an iWeb SIPP. Easy and low cost. Only regret is I can’t access Lindsell Train funds.
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CGT/Dividend Tax Obsessive on 08/05/2018(UTC)
xcity
Posted: 26 April 2018 21:34:28(UTC)
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My one bit of advice would be not to choose a SIPP provider just by price. Safety net only goes up to £50k. Everything will be in a ring fenced account but proving what's yours depends on the adequacy of their administration and IT. And that does vary between providers.
Should be possible to get nearly all providers to a low overall % using passive, though you might need to use ETFs rather than funds to do it.
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Tim D on 26/04/2018(UTC)
CGT/Dividend Tax Obsessive
Posted: 27 April 2018 13:29:23(UTC)
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Hi all,

Thanks very much for this. Agreed that I don’t want to pick the very cheapest – was hoping to benefit from other people’s due diligence in this thread!

iWeb’s SIPP looks immediately pretty good. So £180/year as a platform fee/admin charge, a £60 fee to transfer in my pension. They seem to be owned by Halifax, so at least they aren’t some fly-by-night outfit.

Unfortunately they seem to have exit fees and account close down fees that aren’t small (aren’t those illegal, or is that just stakeholder pensions?) (£90 and £300 respectively)
Still much better than ~£1k I’m paying to L&G now, and the ~£2k I’ll pay once I increase the amount in the pension.

When I put in money to buy OEICs – does anyone know what fees they’ll charge? Couldn’t spot that on their website.

My L&G pension is solely invested in the L&G International Fund – will iWeb be able to take that on?

Anything else I might be missing?
Tim D
Posted: 27 April 2018 14:37:29(UTC)
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As I read the iWeb SIPP charges, that £300 account closure fee only applies under certain circumstances (if you drawdown your capital to nothing within 12 months of opening the account!)

Whether you can do an "in-specie" transfer to iWeb likely depends on what unit type you have on L&G's platform (probably "R"?) and what unit type iWeb use (almost certainly not "R"... probably "I"?). They might be able to take the R ones and then convert them, or you might have to sell, transfer cash and repurchase... iWeb ought to be able to advise you on this. I've had to do this for one pension move... time out of the market was about 3 days IIRC. Other stuff I've been able to do in-specie transfers.

No experience with iWeb myself.
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CGT/Dividend Tax Obsessive on 27/04/2018(UTC)
CGT/Dividend Tax Obsessive
Posted: 09 May 2018 17:10:22(UTC)
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Hi all,

More questions - I've exchanged a few emails with IWeb customer services and they don't seem very good. After covering the charges for the initial transfer and ongoing platform fees - they're basically unable to answer any other questions and say I should "call the brokers" which seems really bizarre.

There's a lot of charges on the http://www.iweb-sharedea...-rates/sipp-charges.asp

And I'm not exactly sure what is a likely charge or what isn't. E.g. A dividend reinvestment charge of 2%. They haven't yet clarified whether there's a dealing charge. It's very annoying! The customer service *before* I've joined up being so terrible is a bit of a red flag honestly.

Is there's anyone who's actually with Iweb SIPPs?

Also, there's a swathe or charges for income drawdown. Obviously I don't intend to be paying these for years - but is there any restriction on how much they could change between now and the intervening decades? I'd imagine they can certainly increase them with inflation - but is this basically unrestricted?

I also had a quick look at Interactive Investors - any recommendations for them?
Joe 90
Posted: 09 May 2018 18:55:07(UTC)
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I recently set up a SIPP with iWeb. No problems. Also have an account with ii. Fine too!
Richard T
Posted: 10 May 2018 15:45:28(UTC)
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CGT/Dividend Tax Obsessive;61317 wrote:
Hi all,

I've got an L&G stakeholder pension with about £110k in it. I plan to top it up to about £190k this year.

At the moment the stakeholder pension is entirely invested in the 'L&G International Fund' and looks to be charging about 1% per year.

Especially when I get up towards £200k, this 1% seems a decent whack of money, especially when my S&S ISAs only cost about 0.21% with the platform and fund fees.

Is it worth me switching over to something cheaper? Maybe a SIPP? I don't want to do anything creative or exciting, just put my money in sensible passive trackers with the lowest fees possible and leave it there for decades (I'm 36). Should it be fairly easy/free to transfer over? Is there a flat charge pension that's recommended?

Thanks


I'm in a similar position - stakeholder with L&G - but roughly twice the amount. The same thoughts have been in my mind. As you say, that c.1% seems to add up and be a "drag". However, doing it a lot cheaper depends on finding suitable funds at a much lower cost, and it seems the headline AMC isn't ever the full story. Also, I just compared the performance of my L&G multi-asset fund against Melchior Global Multi-Asset and it's done massively better over the last five years, despite the Melchior fund's annual cost being around 2.5% before platform fees.

Just my tuppence worth...
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CGT/Dividend Tax Obsessive on 10/05/2018(UTC)
CGT/Dividend Tax Obsessive
Posted: 10 May 2018 16:43:39(UTC)
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Thanks Joe,

Good to hear it's not so bad moving across. Did you actually end up calling the brokers to clarify any charges as Customer Services seem to want me to do? In particular, the 2% dividend charge seems worrying - have you been affected by that at all? And do you have any sense of how much the charges can change?
CGT/Dividend Tax Obsessive
Posted: 10 May 2018 16:57:10(UTC)
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Thanks Richard - agreed.

Stakeholder pensions aren't perfect - but at least the rules around exit fees/annual charges are a little reassuring.

SIPPs feel a little more exciting than necessary for me. If I could find a low cost stakeholder platform maybe that would be the way to go.
Joe 90
Posted: 10 May 2018 20:03:19(UTC)
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CGT/Dividend Tax Obsessive;62041 wrote:
Thanks Joe,

Good to hear it's not so bad moving across. Did you actually end up calling the brokers to clarify any charges as Customer Services seem to want me to do? In particular, the 2% dividend charge seems worrying - have you been affected by that at all? And do you have any sense of how much the charges can change?


All of my investments are in accumulation funds so I don’t anticipate any dividend reinvestment charges. My wife has a trading account with income units and she plans to wait until there is a sensible sum then invest it in one go incurring a £5 charge.
Joe 90
Posted: 10 May 2018 20:08:11(UTC)
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CGT/Dividend Tax Obsessive;62041 wrote:
Thanks Joe,

Good to hear it's not so bad moving across. Did you actually end up calling the brokers to clarify any charges as Customer Services seem to want me to do? In particular, the 2% dividend charge seems worrying - have you been affected by that at all? And do you have any sense of how much the charges can change?


I’m not sure how brokers fit in. I simply completed the forms and sent them to iWeb. Everything happened without any further input from me.

Fees seem pretty clearly set out on the website. Of course charges can change from time to time. Interactive Investor recently increased theirs. There is plenty of competition now and if a platform starts to ask silly fees then vote with your feet!
CGT/Dividend Tax Obsessive
Posted: 14 May 2018 15:17:50(UTC)
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Thanks Joe - really my question is about making sure I understand all the charges in advance. Am I right that the dealing charge is £5?
philip gosling
Posted: 14 May 2018 16:54:36(UTC)
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CGT/Dividend Tax Obsessive;62290 wrote:
Thanks Joe - really my question is about making sure I understand all the charges in advance. Am I right that the dealing charge is £5?





Yes to trade online £5 ......but there are more charges - Print them off from their website at

http://www.iweb-sharedea...DFs/CostsAndCharges.pdf

dd
Posted: 14 May 2018 21:28:19(UTC)
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I haven't yet been persuaded by IWEB SIPP, partly due to charges.
However, I am very happy indeed with my IWEB ISA, in which I hold Investment Trusts and deal for £5 (+ stamp duty or whatever applies).
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