Pension charges - What is a good deal

Discussion in 'Pensions' started by NewEdition, May 29, 2018.

  1. Qwerty22

    Qwerty22 New Member

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    And if you look at the constituents of those MyFolio Market funds, they're nearly all Vanguard, which are ultra low cost!
     
  2. David Quinn

    David Quinn Frequent Poster

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    The Friends First deal is a very good structure for larger accounts. The €120 annual policy fee (its not an application fee, and applies every year), takes the good out of the lower AMC until your account goes over €120,000 or so.

    The 0.95% MyFolio Market quote on the Standard Life site is the full initial commission price. Standard Life don't like undercutting their commission based brokers!
     
  3. David Quinn

    David Quinn Frequent Poster

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    Pricing across all the insurance providers, Conexim, Davy Select very similar now and falling all the time. I would recommend that anyone starting a pension now doesn't accept 5 years of early encashment penalties as I feel the market is going to get much more competitive. Fees will come down further so it will be worth having the flexibility to switch
     
  4. Qwerty22

    Qwerty22 New Member

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    Last edited: Jun 13, 2018
    So, imagine I have a cheap tracker ETF in mind, and a pot of €100k, what is the lowest cost pension I can get?

    I have a SIPP from living the UK, and it has a fixed cost of ~£200/year, so on a £100K pot I'd only pay 0.2%, and with a low cost tracker (0.06%) a total annual charge of 0.26%. It looks like I'd struggle to even reduce it to 3 times that from an Irish pension.
    (Also I didn't need to go through a broker to open the SIPP, I did it all online.)
     
    Last edited: Jun 13, 2018
  5. David Quinn

    David Quinn Frequent Poster

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    It's an interesting question Qwerty! As an advisor myself, I haven't done much research into low cost pension contracts that retail investors could access directly themselves.

    Most SIPP and Small Self Administered Pension providers have a similar ongoing charging structure to your UK pension, with 0.25%+Vat Trustee and Admin fee, and then you could access Vanguard ETF's through a stockbroker for 0.06% as you mention. However, they all have a set up fee. There doesn't seem to be enough scale in the Irish market to attract the very low cost online providers. They are barely able to make money in the UK as it is.
     
  6. macfran

    macfran New Member

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    Last year a relative of mine set up a pension policy with monthly payments of €700.
    He has given me a copy of the " Allocation of Units" schedule, it states;

    The Initial Investment Percentage at the Policy Commencement date is 74% of the Relevant Contribution.
    The Adjustment Date is 11 years from the Policy Commencement Date.

    Based on the above am I correct in saying, from each monthly payment of €700 a deduction of €182 will be made for the first 11years?
    Also there is AMC of 1%
     
  7. Sarenco

    Sarenco Frequent Poster

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    I'm afraid we can only dream of having that type of fee arrangement available to us here. :(
     
  8. LDFerguson

    LDFerguson Frequent Poster

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    I'd have to see the definition of the "Adjustment Date" as that's not an industry-standard term. But it certainly looks like that whopping great deduction will be made for a certain period of time.
     
  9. Gordon Gekko

    Gordon Gekko Frequent Poster

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    That is highway robbery that Dick Turpin would be proud of.

    No wonder the industry has such a bad name and people are so cynical about pensions.
     
  10. SBarrett

    SBarrett Frequent Poster

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    Is that in Ireland? I am not aware of any contract in the market that would deduct 26% of contributions for 11 years. I'm not even sure if there's any contracts out there that will pay deduct more than 25% of the first years premium.


    Steven
    www.bluewaterfp.ie
     
  11. LDFerguson

    LDFerguson Frequent Poster

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    My guess is that the "Adjustment Date" refers to something else - not the 74% allocation. I'd assume / hope that the 74% allocation rate only exists for a year at most and then is higher. But it's still a horrible contract in that future increases to the contribution above €700 per month will probably attract the same 26% charge for a period and so on.