Buy Out Bond

A

Angelab

Registered User
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My Son has taken redundancy and he has been advised to move his pension with his former employer to a Buy Out Bond and has been offered one with Bank of Ireland and the Annual Management Charge is 1.5% per annum, would this be a fair charge?
 
Hi Angelab,
At a minimum your son should be able to get a Buy Out Bond with a 1% annual charge. In addition I would recommend that you get information on the investment performance ( net of fees ) of the various funds that the Buy Out Bond will be invested in. There can be a wide difference between the best and worst performers ( albeit on a an historic basis ) for Buy out Bonds, Pensions, ARFs etc. High cost and poor investment performance will greatly reduce the value of your sons pension over a medium to long time frame,

If it is a reasonably large amount, getting some independent professional advice could be money well spent. As a starting position I would not recommend a tied agent like any of the banks. Any adviser should be able to provide you with comparisons re investment performance and charges etc This should help your son make an informed decision as to the best option for him.

Regards Vincent
 
North Star said:
Hi Angelab,
At a minimum your son should be able to get a Buy Out Bond with a 1% annual charge. In addition I would recommend that you get information on the investment performance ( net of fees ) of the various funds that the Buy Out Bond will be invested in. There can be a wide difference between the best and worst performers ( albeit on a an historic basis ) for Buy out Bonds, Pensions, ARFs etc. High cost and poor investment performance will greatly reduce the value of your sons pension over a medium to long time frame,

If it is a reasonably large amount, getting some independent professional advice could be money well spent. As a starting position I would not recommend a tied agent like any of the banks. Any adviser should be able to provide you with comparisons re investment performance and charges etc This should help your son make an informed decision as to the best option for him.

Regards Vincent
Click to expand...
Hi Vincent

Thanks for your advice will pass it on to my Son. The amount is €27500 approx.

Regards

Angela
 
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