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P***** Off With High Pension Fund Charges

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Pension charges of 1-2% AMC plus hidden extras is driving me mad.

Is there a UK provider who does dirt cheap fees? I am interested in index/etf funds.

I know that H-L do the HSBC index range at 0.25% AMC plus about 0.04% or so extra charges. Not bad.

Are there any other options?

I read that ATP a danish firm are coming in with the option of trackers at 0.04% per annum. Anyone know if these guys will offer personal pension or if these are only company pensions? Likewise any idea when they are setting up?

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H-L have HSBC trackers at the charge you suggest, but these seem to have hidden charges/underperformance AFAIK, the HSBC Pacific index appears awful, but Euro, US and FTSE seem OK; however, H-L also have the new L&G EM index which is handy at approx 0.7%

2 other options:

via Cavendish direct website (a discount broker) - stakeholder pensions by L&G (with L&G index funds) and also Aviva (with BGI index funds - institutional ones as far as I can tell) on competitive AMC of 0.55-0.6%; additionally, for the Aviva (BGI) stakeholder, their index funds seem to track the index much better, to the extent that they make up for the higher charge compared to H-L HSBC funds

The Aviva is probably the only one that does not have an EM undex, however, it has an excellent Asia-Pac (Developed) index. However in other ways I think the Aviva may be the best. Furthermore, at £100k balance, AMC drops to 0.4%.

All of these have no dealing charges AFAIK.

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There's a US company called Vanguard which provides very cheap index funds with charges of 0.1 - 0.25 %. They're big in the states but very few companies offer the funds here as they would have to lower their prices too!.

Alliance Trust (FTSE 100 investment managers) -www.alliancetrust.com are the only company I know of that offers them.

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Alliance trust and vanguard are fine - the fixed annual fee is £75 +vat, so £90 ish (?) - http://www.alliancetrustsavings.co.uk/pdf/select-sipp/select-sipp-fees.pdf = plus trading fees; I think it is possibly pretty good for ETFs but am not sure

you really need a balance of £50,000+ to make that £90/year worthwhile against other stakeholder pensions I mentioned; I am sure the Vanguard index funds track much better than the HSBC ones

a balance of £50,000 makes £90/year fee equivalent to a 0.18% additional loading, add on to the vanguard FTSE index AMC of 0.1% comes to 0.28%, which IS pretty good, even with the £12.50 dealing charge for fund switches (equiv to 0.025% fee), so if you trade/rebalance once per year you pay about 0.30% on FTSE index fund;

However the £5 per direct debit (I guess this is per month) for contributions is a big turn-off for people on average incomes, i would be careful about the fees!

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There's a US company called Vanguard which provides very cheap index funds with charges of 0.1 - 0.25 %. They're big in the states but very few companies offer the funds here as they would have to lower their prices too!.

Alliance Trust (FTSE 100 investment managers) -www.alliancetrust.com are the only company I know of that offers them.

Vanguard require £100k per fund which is a bit over what I have to invest!

Hopefully they will reduce their minimum amount. The moves by ATP look very promising.

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H-L have HSBC trackers at the charge you suggest, but these seem to have hidden charges/underperformance AFAIK, the HSBC Pacific index appears awful, but Euro, US and FTSE seem OK; however, H-L also have the new L&G EM index which is handy at approx 0.7%

2 other options:

via Cavendish direct website (a discount broker) - stakeholder pensions by L&G (with L&G index funds) and also Aviva (with BGI index funds - institutional ones as far as I can tell) on competitive AMC of 0.55-0.6%; additionally, for the Aviva (BGI) stakeholder, their index funds seem to track the index much better, to the extent that they make up for the higher charge compared to H-L HSBC funds

The Aviva is probably the only one that does not have an EM undex, however, it has an excellent Asia-Pac (Developed) index. However in other ways I think the Aviva may be the best. Furthermore, at £100k balance, AMC drops to 0.4%.

All of these have no dealing charges AFAIK.

Hi Si1,

Yes checked out the comparison between the HSBC Pacific and the L&G Asia and a big difference. Perhaps they track against different indexes. The HSBC one seems heavily weighted in Australia from when I last looked.

The European and Japanese have a close match whilst the US slightly worse for the HSBC fund.

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H-L have HSBC trackers at the charge you suggest, but these seem to have hidden charges/underperformance AFAIK, the HSBC Pacific index appears awful, but Euro, US and FTSE seem OK; however, H-L also have the new L&G EM index which is handy at approx 0.7%

2 other options:

via Cavendish direct website (a discount broker) - stakeholder pensions by L&G (with L&G index funds) and also Aviva (with BGI index funds - institutional ones as far as I can tell) on competitive AMC of 0.55-0.6%; additionally, for the Aviva (BGI) stakeholder, their index funds seem to track the index much better, to the extent that they make up for the higher charge compared to H-L HSBC funds

The Aviva is probably the only one that does not have an EM undex, however, it has an excellent Asia-Pac (Developed) index. However in other ways I think the Aviva may be the best. Furthermore, at £100k balance, AMC drops to 0.4%.

All of these have no dealing charges AFAIK.

Cavendish look good! However with the exception of the HSBC Pacific fund, the HSBC range tracks the L&G so may as well stay with H-L.

Not compared the HSBC range to the Aviva one. A close fit or not with the except for the Pacific one???

Which site do you use ot compare the indexes? I am comparing on the H-L site.

Edited by ringledman

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Are there any pension providers that do low fees for ETFs? I believe H-L charge 0.5% on any stockmarket trade, ie buying an ETf on the LSE?

I am thinking of building up a core holding of cheap trackers in the main markets and then add an element of specific diversification into future trends.

My thinking -

Healthcare/Pharma

Emerging Markets

Nuclear/Energy

Corporate Bonds

REITs

Another gripe - Dont you guys get annoyed at the lack of an ETF range in the UK? The USA is awash with cheap ETFs. Likewise the fact that so many ETFs here are in Dollars also is annoying!

My thinking then - HL or Cavendish for core holdings of Trackers. Then set up an AJ Bell Sippdeal for specific ETFs as it appears that they only charge a dealing fee for LSE trades instead of an annual charge. As HL charge 0.5% annual charge for stocks/ETF bought through the stockmarket I think Sippdeal only charge a fee of £9.95 online or £29.95 by phone.

The initial fee doesn't worry me at all as I intend to hold each ETF for years. The thing I want to avoid or at least cut down is heavy annual charges.

Also - I guess you can hold more than one SIPP?

Any thoughts?

Ta.

Edited by ringledman

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Also - I guess you can hold more than one SIPP?

... and pay more than one set of charges :blink:

Just pick one that looks competitive and stop bellyaching! FWIW, I use H-L, and while I'm never sure whether they're really my best choice, I just know that if I switch to AN Other I'll have exactly the same doubts ...

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Vanguard require £100k per fund which is a bit over what I have to invest!

this is circumvented if you invest thru a wrapper like Alliance Trust

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Cavendish look good! However with the exception of the HSBC Pacific fund, the HSBC range tracks the L&G so may as well stay with H-L.

Not compared the HSBC range to the Aviva one. A close fit or not with the except for the Pacific one???

Which site do you use ot compare the indexes? I am comparing on the H-L site.

FT.com

I THINK the fund values they graph are not inclusive of AMC, from various deductions, comparisons etc

the institutional Aviva BGI funds seem to be really excellent compared to HSBC and L&G; with the exception of the poor HSBC pacific fund, Aviva has same options as HSBC, and of course lacking an EM fund.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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