MartinFlower
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Im transferring 2 older pensions into a new scheme recommended to me by a financial advisor
- MartinFlower asked 1 year ago in Investments
- See all 3 answers | report abuse
Expert Financial Adviser Answer
James Brooke
answered 1 year ago
Setting up a regular premium pension contract is a one off job, unless the adviser is also monitoring and advising on the fund choices, fund management and rebalancing, for which he seems to be being paid 0.5% of the fund value anyway, so I don't see why there is a fixed fee as well, unless the fund value is small.
I would have thought that, as a maximum, a one off fee of between £500 and £1,000 plus say 3% of each premium would be more than enough.
I suspect that you will find that the adviser will want to renew the 'fixed fee' each year, but with some indexation for inflation.
You will need to look at the illustration that the adviser ought to have provided you with to see the shape of the charges, but it certainly seems as though they are bieng front end loaded. May I ask who the recommended provider is?
I suspect that you will find that the 17% applies to the first year of any contribution or any increase in contributions to stop you just waiting for a year and then paying in more. Again, you will need to look at the illustration and documentation to see how the charges are levied and what tiriggers them.
By the way, since pensions give tax deferral not tax relief, unless there is an emplyers pension contribution conditional or you also making a contribution, or you are already using your ISA and Capital Gains Tax Allowances in full, you may find that making pension contributions is not the best thing for you to do with your money, as you probably won't live long enough to get out what you have put in.
I did a piece on BBC Money Box with Martin Lewis trying to explain this on radio (not easy doing maths over the radio) a while ago.
http://news.bbc.co.uk/1/hi/programmes/moneybox/8449832.stm
Please let me know if I can help further.
report abuse
I would have thought that, as a maximum, a one off fee of between £500 and £1,000 plus say 3% of each premium would be more than enough.
I suspect that you will find that the adviser will want to renew the 'fixed fee' each year, but with some indexation for inflation.
You will need to look at the illustration that the adviser ought to have provided you with to see the shape of the charges, but it certainly seems as though they are bieng front end loaded. May I ask who the recommended provider is?
I suspect that you will find that the 17% applies to the first year of any contribution or any increase in contributions to stop you just waiting for a year and then paying in more. Again, you will need to look at the illustration and documentation to see how the charges are levied and what tiriggers them.
By the way, since pensions give tax deferral not tax relief, unless there is an emplyers pension contribution conditional or you also making a contribution, or you are already using your ISA and Capital Gains Tax Allowances in full, you may find that making pension contributions is not the best thing for you to do with your money, as you probably won't live long enough to get out what you have put in.
I did a piece on BBC Money Box with Martin Lewis trying to explain this on radio (not easy doing maths over the radio) a while ago.
http://news.bbc.co.uk/1/hi/programmes/moneybox/8449832.stm
Please let me know if I can help further.
Im transferring 2 older pensions into a new scheme recommended to me by a financial advisor
- MartinFlower asked 1 year ago in Investments
- See all 5 answers | report abuse
SquareInsider
answered 1 year ago
Martin Flower [ Pension Transfer Questions ? ]
The question is now a bit dated of course, and at face value is not easily answered as one does not state the individual or combined value of the pension pots in question. I am not questioning any of the advices given by others above. Essentially, they are all quite relevant and broadly on the same par overall. I do agree though, that the fees are very high for what should be a very simple case of transfer and management.
Should it be the case that individual pension accruals amount to over # 50,000 GBP, then there are very compelling reasons for the consideration of transferring same pension pots into HMRS approved schemes offshore. There are naturally conditions that apply for this facility to be granted at outset. There are also fees involved in setting-up such schemes at around # 700 to # 2,000 GBP at tops.... according to complexity and all tax mitigation issues involved undoubtably.
These are one-off fees at pretty much an industry standard. You are not compelled to enter into any asset management contracts, and can usually manage the new Offshore Pensions Bond very easily yourself with free investment advice included. Should you elect for professionally managed bond accounts, then the basic fees are around 1.25% yearly.
I would say that if your collective pension pots are substantial, then take independent advice from at least two domestic IFA recognised consultancies, and equally, two professionally IFA qualified ' Offshore ' corporations.
One must also take into account: Level of fixed rate income gains. Tax on income potentialities. Ultimate IHT predations and transfer of estate upon mortality.
Offshore investment benefits & tax mitigation may not be suitable, or even accessible to UK domiciled nationals, and potential costs involved might outweigh the strategies for doing so across the board inter-alia. The main point being, do not act upon any first opinions proferred at outset.
Pension savings and their security are important. Take a bit of time to research all options as decisions made in rash are mostly hard to resolve or remedy in the future !
report abuse
The question is now a bit dated of course, and at face value is not easily answered as one does not state the individual or combined value of the pension pots in question. I am not questioning any of the advices given by others above. Essentially, they are all quite relevant and broadly on the same par overall. I do agree though, that the fees are very high for what should be a very simple case of transfer and management.
Should it be the case that individual pension accruals amount to over # 50,000 GBP, then there are very compelling reasons for the consideration of transferring same pension pots into HMRS approved schemes offshore. There are naturally conditions that apply for this facility to be granted at outset. There are also fees involved in setting-up such schemes at around # 700 to # 2,000 GBP at tops.... according to complexity and all tax mitigation issues involved undoubtably.
These are one-off fees at pretty much an industry standard. You are not compelled to enter into any asset management contracts, and can usually manage the new Offshore Pensions Bond very easily yourself with free investment advice included. Should you elect for professionally managed bond accounts, then the basic fees are around 1.25% yearly.
I would say that if your collective pension pots are substantial, then take independent advice from at least two domestic IFA recognised consultancies, and equally, two professionally IFA qualified ' Offshore ' corporations.
One must also take into account: Level of fixed rate income gains. Tax on income potentialities. Ultimate IHT predations and transfer of estate upon mortality.
Offshore investment benefits & tax mitigation may not be suitable, or even accessible to UK domiciled nationals, and potential costs involved might outweigh the strategies for doing so across the board inter-alia. The main point being, do not act upon any first opinions proferred at outset.
Pension savings and their security are important. Take a bit of time to research all options as decisions made in rash are mostly hard to resolve or remedy in the future !
Im transferring 2 older pensions into a new scheme recommended to me by a financial advisor
- MartinFlower asked 1 year ago in Investments
- See all 3 answers | report abuse
Expert Financial Adviser Answer
James Brooke
answered 1 year ago
Setting up a regular premium pension contract is a one off job, unless the adviser is also monitoring and advising on the fund choices, fund management and rebalancing, for which he seems to be being paid 0.5% of the fund value anyway, so I don't see why there is a fixed fee as well, unless the fund value is small.
I would have thought that, as a maximum, a one off fee of between £500 and £1,000 plus say 3% of each premium would be more than enough.
I suspect that you will find that the adviser will want to renew the 'fixed fee' each year, but with some indexation for inflation.
You will need to look at the illustration that the adviser ought to have provided you with to see the shape of the charges, but it certainly seems as though they are bieng front end loaded. May I ask who the recommended provider is?
I suspect that you will find that the 17% applies to the first year of any contribution or any increase in contributions to stop you just waiting for a year and then paying in more. Again, you will need to look at the illustration and documentation to see how the charges are levied and what tiriggers them.
By the way, since pensions give tax deferral not tax relief, unless there is an emplyers pension contribution conditional or you also making a contribution, or you are already using your ISA and Capital Gains Tax Allowances in full, you may find that making pension contributions is not the best thing for you to do with your money, as you probably won't live long enough to get out what you have put in.
I did a piece on BBC Money Box with Martin Lewis trying to explain this on radio (not easy doing maths over the radio) a while ago.
http://news.bbc.co.uk/1/hi/programmes/moneybox/8449832.stm
Please let me know if I can help further.
report abuse
I would have thought that, as a maximum, a one off fee of between £500 and £1,000 plus say 3% of each premium would be more than enough.
I suspect that you will find that the adviser will want to renew the 'fixed fee' each year, but with some indexation for inflation.
You will need to look at the illustration that the adviser ought to have provided you with to see the shape of the charges, but it certainly seems as though they are bieng front end loaded. May I ask who the recommended provider is?
I suspect that you will find that the 17% applies to the first year of any contribution or any increase in contributions to stop you just waiting for a year and then paying in more. Again, you will need to look at the illustration and documentation to see how the charges are levied and what tiriggers them.
By the way, since pensions give tax deferral not tax relief, unless there is an emplyers pension contribution conditional or you also making a contribution, or you are already using your ISA and Capital Gains Tax Allowances in full, you may find that making pension contributions is not the best thing for you to do with your money, as you probably won't live long enough to get out what you have put in.
I did a piece on BBC Money Box with Martin Lewis trying to explain this on radio (not easy doing maths over the radio) a while ago.
http://news.bbc.co.uk/1/hi/programmes/moneybox/8449832.stm
Please let me know if I can help further.
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