The HfP chat thread – Thursday 13th May

This article is closed to new posts. Discussion continues in the HfP Forums.

• Sam says:

  13 May13 May 16:05

  I have just created an online account for my pension and am shocked at the charges – admittedly I should have looked earlier but this is my workplace pension. On a monthly basis £3-5 is taken out as the fund management fee (0.05%) and platform fee (0.23%) combined and the pension pot has just above 25k in! Is this normal for pensions? I am comparing these fees against the fees I have for the Vanguard S&S ISA which is passive and I know this is actively managed fund and a different product (pension) but this still seems high to me. Are these charges normal?

  • Genghis says:

    13 May13 May 16:14

    Looks alright to me. You won’t get much cheaper with Vanguard. My current and deferred workplace schemes are much cheaper for reference.

  • Toaster says:

    13 May13 May 16:16

    Vanguard fees are:
    platform charge of 0.15%pa and the average investment fund charge of 0.2%pa

    • John says:

      13 May13 May 16:54

      But you won’t see the fee being taken from the fund as it is accounted for in the price.

      So with a value of £25k with Vanguard you will see about £9 being taken every quarter

      • A says:

        13 May13 May 17:14

        The asset management industry has been fantastic at making it staggeringly difficult to work out how much in fees you’ve actually paid. Embedding the fee in the spread is one way this obfuscation occurs.

        • Genghis says:

          13 May13 May 17:39

          Agreed. But how would the fees (ongoing) be embedded in the spread (one off)?

        • A says:

          13 May13 May 18:38

          @Genghis – apologies for lack of clarity, was talking about initial fee only. I have one pension provider who charges AMC by reducing number of units bought each time you buy with monthly contribution.

          It’s really frustrating. There should be a section on every online account called “fees” that sets out exactly what you’ve been charged every year, even if embedded/charged in non-cash ways.

        • James says:

          13 May13 May 18:56

          I’m paying about £10k pa and consider it money well spent.

          There was a time I just thought to hell with it & I can do it for myself just as well for the platform fee and no more. But my guys have done OK so currently are justifying the fee.

        • Genghis says:

          13 May13 May 19:39

          @A. Thanks for clarification. That is a bit naughty. Completely agree on charges. It’s a right maze

        • John says:

          14 May14 May 05:33

          There’s no spread for single priced oeics

        • Genghis says:

          14 May14 May 06:36

          @john but potential for swing pricing / dilution levy. Only protects long term buy and holders.

  • Neil says:

    13 May13 May 16:59

    Can’t be many active funds that charge as little as 0.05%

    If you look at any of the big retail platforms you’d pay more with many of them I suspect.

    • James says:

      13 May13 May 20:44

      0.65% plus platform fee is common. You might pay a custody fee on top plus if you have gone for active mgt, they’re not free.

      Up to you if you think they earn their keep. Some easily do. Some don’t.

  • TicknBash says:

    13 May13 May 17:59

    Admittedly haven’t given much care to mine.
    Just checked my workplace pension with Standard Life and if you’re getting a shock I just read 1.01% charge on mine on a similar £24k pot.

    Reallocated from passive to a mixture of Far East and UK equities link since Covid hit.

    Suffice to say I should sack SL and move it to Vanguard as it is often mentioned here.

    • Sam says:

      13 May13 May 18:10

      Thanks all. Mine is with Aegon (Retirement choices – they have so many strands!). We had a pension presentation at work yesterday and I set up my online account today.

      @Genghis – if you don’t mind saying, who are you with if your provider/platform are cheaper?

      Its an actively managed fund but in the last two and a bit years its only gone up by approx 1.6k in value – my S & S ISA has done better in less time! I’m going to start reading into SIPP’s and see if they are a better option for me and look – it’s a minefield and a full time job in its own right!

      • AJA says:

        13 May13 May 19:02

        @Sam Are you invested in “accumulation” or “income” units? If it’s the former that may explain the fund performance as you are selling units each month to pay the fees and that is a double-whammy when the markets fall. Not only do you have fewer units over all you also have to sell more units to pay the fees. Not sure how much you contribute each month, that also has an impact. You may want to consider switching to “income units” and paying the fees out of the income or paying the fees separately if Aegon allows.

        That said your fee percentage is low. I have a SIPP with Ascentric (previously part of Royal London and now owned by M&G) and pay 1% in total for platform and fund management. Just looked and they get crap reviews but I find them decent and am getting decent returns. I like their online platform too. Easy to keep abreast of performance.

        • Sam says:

          13 May13 May 19:31

          @AJA, just did some research and its accumulation fund – https://markets.ft.com/data/funds/tearsheet/summary?s=gb00bym2yz42:gbx

          Employer contributes 6%, I do 10% and I’m a HRTP and I saw over the years the more there is in the pot the higher the charge as expected.

          @Jerry – yes I have a full breakdown for each month now I have my online account set up but when I saw the charges, they seemed high to me but from responses it appears the fees are on the low/normal side.

          Thanks LL – I didn’t know that so useful to know.

        • Genghis says:

          13 May13 May 19:49

          Completely disagree. Keep as acc units and pay fees through partial sales. It’s all automatic. Also paying any platform fees separately would be a bit silly given as a HRTP every 58p of fees paid from the pension pot would cost £1 from cash in hand, maybe even less than 58p if the employer also contributes any employer NI saved.

      • Jerry says:

        13 May13 May 19:14

        Pension companies must tell you how much they have charged you for each year. I have a stakeholder pension with Aviva at 0.40% but no fund fee on my selection. I also have an Interactive Investor SIPP. The monthly charge is £10 flat fee + £9.99 monthly platform fee which covers the SIPP, a trading account an an equities ISA. For me this a platform fee of 0.02%. All fund management fees are on top. My cheapest fund is 0.13%. The £9.99 includes 1 free trade worth £7.95 and every third Wednesday of the month it is free to invest in funds. The more you have in your SIPP (over £50k) a fixed fee becomes more attractive – especially if you have an ISA too. Vanguard will be a game changer here for charges as it was in the US. My mid term plan is to migrate my Aviva pension to ii but the fund it is invested in is doing well and the charge would be 0.75% as a standalone. Do your own research but the management savings are potentially huge. Before I opened the SIPP I was paying Prudential 1%.

        • Magic Mike says:

          13 May13 May 20:36

          AJ Bell/Youinvest £10 per month flat fee for a SIPP if you only invest in ETFs, plus the ETF fees. Check Monevator for low cost trackers, starting at 0.05%.

        • Hugh says:

          13 May13 May 21:34

          I opened an II Sipp last month in preparation for xferring my DC workplace pension later in the year, but I never knew about the 3rd Wednesday free trade feature! Thanks for that update!

      • Genghis says:

        13 May13 May 19:44

        One is administered by Fidelity and one by Willis Towers Watson. But you can’t access them unless you’ve worked / work at the same places I work. It’s luck of the draw (and how good your pensions team have negotiated with any buying power they might have) almost whether you get a good one (ie fees of literally a few bips) or a bad one (0.6%+). Move the bad ones occasionally to a SIPP through partial transfer. Leave the good ones where they are, assuming they deliver what you want.

  • Lady London says:

    13 May13 May 19:14

    The cap on workplace schemes for total charges is 0.75%pa I believe.

    I am seeing press where the feeling seems to be that the industry is used to charging 2% and well more, and struggling with total max 1.5% including the adviser’s fee that this could somehow set as a generally acceptable benchmark?

    I am not an expert and would love to see any advisers’ comments.

    Not all workplace schemes are good value and this may be why some smarter people on here to contribute up to the max employer match then just before the end of the tax year move to their own PP or SIPP.

• mutley says:

  13 May13 May 16:35

  Visiting friends in St Albans area late June, any experience of The Grove Watford, Sopwell House, or St Michaels Manor in St Albans.

  • BSI1978 says:

    13 May13 May 16:55

    If fully open, St Michael’s Manor beats Sopwell for me. I haven’t tried The Grove but obviously the other 2 are closer to your friends. SMM is directly in the City centre (down Fishpool Street) so plenty of dining/drinking & shopping options close by & the grounds are fantastic. Whilst the Veralamium & Cathedral are within walking distance and worth a shout if this is your first visit.

    Sopwell famed for their procedures etc. and more likely to be a quieter, more chilled break if that is important.

    • Andrew (@andrewseftel) says:

      13 May13 May 17:13

      I agree – St Michael’s location is great if you actually want to see the city. There’s also a brand new (built over lockdown) Travelodge right on the high street. If you can live with ‘functional’ then my experience is that the newness of all the fixture and fittings means it punches above its weight.

  • Alex says:

    13 May13 May 17:08

    Grove is the best of the three pre-covid, the glasshouse buffet was great. Not sure what it’s like now though but if they’re doing a full service then I’d choose that.

  • Tracey says:

    13 May13 May 19:48

    Great room choice at Sopwell, particularly if you like outdoor fire pits and quirky cottage style rooms. They are all lovely hotels, though I wouldn’t call the Grove as being in St Albans.

    • mutley says:

      13 May13 May 21:32

      Thanks all, I appreciate your help.

• BSI1978 says:

  13 May13 May 17:25

  Jacksonville, FL query – does BA fly to any nearby airports? JAX doesn’t appear to be coming up and I am really hoping MCO isn’t the closest international airport……

  • @mkcol says:

    13 May13 May 18:29

    MCO is your closest option for a BA flight. It’s only a 2.5 hour drive, although I’m wondering if you’re bothered more about the airport or the drive?

  • Doug M says:

    13 May13 May 20:08

    Depending on time of day Tampa would only add about an hour to the MCO time, and is a much more pleasant airport.
    Why not connect and fly to Jax direct, probably MIA or PHL would work.

  • Richie says:

    13 May13 May 22:05

    JAX isn’t such a bad airport. I did get a very good flight deal with AA and JetBlue via JFK.

• Steve says:

  13 May13 May 18:55

  Anyone know how long a transaction normally takes to track? Made first purchase on Monday and still not tracked, normal?

  • Toby says:

    13 May13 May 19:13

    Yes normal! I’ve had from 3-21 days. I think it varies by retailer. Boots online is fast for example.

• James says:

  13 May13 May 19:33

  Portugal says no to UK tourists.

  May 30th at the earliest?

• BuildBackBetter says:

  13 May13 May 19:37

  Got the credits for Deliveroo. And yes, it works for Deliveroo plus.

  • Rob says:

    13 May13 May 19:56

    Thanks for confirming.

• GaryD says:

  13 May13 May 19:42

  Any thoughts please..
  I’ll be heading back out to Dubai for a weeks work late June. Lufty have a decent return PE fare from LHR-FRA-DXB at around £540. I’d be travelling with hand baggage only and would like to drop the last leg of the return and pick up a flight to Spain staying air side at FRA with a 2-3 hr connection . With the passenger locator form required for check in is this possible by filling in one for UK & one for Spain ?

  • John says:

    14 May14 May 05:38

    Yes, why would it not be as long as you meet the criteria to enter Spain. Best not to book the Spain flight on Lufty

• David says:

  13 May13 May 19:51

  Does anyone really think BA will be flying an A380 (as is currently timetabled) MIA to LHR by August ?

  • The cyclist says:

    13 May13 May 20:32

    If Biden opens up the US then Yes (60% chance IMHO)
    If not then No!

  • Doug M says:

    13 May13 May 20:33

    On balance no, but if USA opens and most of Europe doesn’t then who knows.

    • David says:

      13 May13 May 21:37

      just contemplating the horror of the club world box on the A380

  • Dubious says:

    14 May14 May 03:44

    Very unlikily. Too many seats to fill and too little cargo capacity to make up the difference. Plus the need to reactivate these aircraft from storage along with the pilots.

    Its far more likily to be swapped to a B777 or A350.

This article is closed to new posts. Discussion continues in the HfP Forums.