Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site

Fundsnetwork no drawdown

StepOne
Lemon Slice
Posts: 668
Joined: November 4th, 2016, 9:17 am
Has thanked: 195 times
Been thanked: 185 times

Fundsnetwork no drawdown

#130145

Postby StepOne » April 5th, 2018, 12:06 pm

Hi,

I have a Fidelity Fundsnetwork pension taken out with Cavendish online a few years ago, because the charges seemed low. But I have just realised through reading their website that drawdown is not an option for this pension.

I am wondering if this is something I should be doing something about now? I'm ten years away from retirement, so I'm assuming that I could keep my pension as is, and transfer it to another provider as I near retirement. Or there is the possibility that in meantime the Fundsnetwork pension does start to offer a drawdown option - they do say on the website they hope to be able to do this in the future.

My preference, though, would be to transfer now if possible, to a provider that does offer drawdown with similar charge levels, to avoid any future hassle. The fundsnetwork fees are 0.25% plus whatever the fund costs are - mine are all in trackers charging between 0.07 and 0.12% annually.

Can anyone suggest a similarly low-charging SIPP that I could potentially transfer to?

Thanks,
StepOne

mc2fool
Lemon Half
Posts: 7812
Joined: November 4th, 2016, 11:24 am
Has thanked: 7 times
Been thanked: 3017 times

Re: Fundsnetwork no drawdown

#130165

Postby mc2fool » April 5th, 2018, 1:16 pm

StepOne wrote:Can anyone suggest a similarly low-charging SIPP that I could potentially transfer to?

That depends on the value of your SIPP. Some brokers simply charge a flat fee, which is good for larger SIPPs.

E.g. Halifax and IWeb (same thing really) both charge £22.50 each quarter (£90pa) if your SIPP is less than £50,000 and £45pq (£180pa) if it's more. So, if your SIPP is either between £36-50K or is more than £72K you'll be paying less than the 0.25% you do currently. Alliance Trust Savings and Interactive Investor also have flat-fee SIPPs, and maybe others too.

I've found http://www.comparefundplatforms.com/ to be quite useful, and (so far as I've checked) accurate. I suggest you start off with a "vanilla" comparison, putting in the whole value as in one fund, zero trades, zero growth and running for one year for a basic comparison and then go from there.

Having said that, if you have a decade to go, and the 0.25% is competitive for you, and you are generally happy with them anyway, I'd just wait until closer to the time...

StepOne
Lemon Slice
Posts: 668
Joined: November 4th, 2016, 9:17 am
Has thanked: 195 times
Been thanked: 185 times

Re: Fundsnetwork no drawdown

#130171

Postby StepOne » April 5th, 2018, 1:42 pm

Thanks for the posts. I also took a look at the Monevator site which has a comparison table, and I think iWeb does look like a good option. The fund value is currently £150k, so the iWeb £180 pa charge would be around half the 0.25% I am currently paying.

One thing I am not clear about though - with iWeb will I have dealing charges each month as funds go in? Currently my contributions are split between 3 tracker funds and as far as I know the trading costs are covered in the 0.25% (I could be wrong about this). If I went with iWeb, would I need to log on each month and make 3 purchases @ £5 a time? Because that would mean an additional £180 of charges each year. Obviously I could reduce this by buying one fund a month, or even one a quarter. But it's a consideration. I like the fact that with the current pension I set up an allocation, and it all happens automatically from there. No worries along the lines of 'what will I buy this month'! (And also no temptation to sell the lot and put it all in the latest penny share tip!).

Does anyone know how the iWeb SIPP works in practice in terms of allocating funds?

Thanks
StepOne

(@FreddBloggs, I took a look at the Close Bros site and it said that currently they cannot accept regular employer contributions, which is a problem as my employer pays into this pension for me each month).

mc2fool
Lemon Half
Posts: 7812
Joined: November 4th, 2016, 11:24 am
Has thanked: 7 times
Been thanked: 3017 times

Re: Fundsnetwork no drawdown

#130178

Postby mc2fool » April 5th, 2018, 2:10 pm

StepOne wrote:If I went with iWeb, would I need to log on each month and make 3 purchases @ £5 a time? Because that would mean an additional £180 of charges each year. Obviously I could reduce this by buying one fund a month, or even one a quarter.

I have an IWeb dealing a/c and an IWeb ISA but not a SIPP, however I'm pretty sure that, yes, you'll have to pay the £5 dealing fee each time you trade.

I believe all of the flat-fee providers do the same and charge dealing fees for trading funds. ATS & II certainly do, although, again, I don't have SIPPs with either, just normal dealing a/cs and ISA. Those two (along with Halifax I believe) do, although, have a regular investment setup, whereas IWeb doesn't.

If you haven't taken a look at http://www.comparefundplatforms.com/ already, do so as it allows you to model and compare amongst providers exactly your requirement, i.e. adding new regular funds and doing regular trades.

StepOne
Lemon Slice
Posts: 668
Joined: November 4th, 2016, 9:17 am
Has thanked: 195 times
Been thanked: 185 times

Re: Fundsnetwork no drawdown

#130193

Postby StepOne » April 5th, 2018, 3:22 pm

When I found out that I was not able to put my pension into drawdown, I emailed Cavendish to find out what my options were, and this was their response;

As you say, we cannot currently offer drawdown or allow any pension benefits to be taken when the pension is under our agency. This is because pensions through us are set up as broker clients and Fidelity FundsNetwork consider that broker clients should take advice from their broker before they can take anything from the pension and so as we cannot give advice Fidelity FundsNetwork will not allow our clients to take benefits from the pension. We are hoping Fidelity FundsNetwork will change this but at the moment we do not have any information on when this will be changed.

So, at the moment, if you want to take the pension you will either have to move the pension to a broker who can give you advice, transfer it to a pension where you can take the benefits or remove us as your agent and have the pension directly with Fidelity FundsNetwork and then they will let you take the pension on an execution only bases.


I'm a bit gobsmacked by this. So currently I have a pension which I cannot take benefits from in any form whatsoever! How is that even allowed? At least it makes up my mind for me that moving to another provider is the best option.

StepOne


Return to “Pensions - Practical Problems”

Who is online

Users browsing this forum: No registered users and 9 guests