Investment & Investing

Also ii are abrdn now - so broadly the same thing. Ask what the differences are beyond fees...

Yeah, Aberdeen acquired II recently

I just did a quick google and it was a acquired in 2022 so hopefully if they were going to make any drastic changes they would have done it by now.

Yeah, abrdn acquired ii recently

For the vowels?

"abirdin" sort of works, phonetically

They should have bought EE.

@Matt101 @Arvy. @cjr thank you so much for the advice. I have set up a meeting with the IFA in a couple of weeks and will be curious to see what they say about why they've recommended that. I suspect they get a kickback from it, but if so that makes me wonder how independent they really are.

@cjr I will find out more and if I decide to go that way I will definitely get in touch with you beforehand.

FWIW in their written consultation the IFA said they recommended abrdn for the following reasons:

1. They are financially strong and experienced in this marketplace.
   
2. They have a proven track record of providing excellent customer service.
   
3. They have a clear and transparent charging structure.
   
4. The plan charges are competitive.
   
   

That all sounds great, until some light research on the internet as a non expert proves 2 and 4 to be apparently incorrect. I'm starting to lose some trust ...

Edit: I realise I forgot to add amount and what the fees are on abrdn. Amount will be £104k, and yep, platform fees are 0.30%. Advisor fees are 1%.

One has to say that those reasons do not really sound a lot like current specific individual experience ... rather it sounds like it might be the marketing literature ... perhaps I'm just cynical.

I guess if you want to have flexibility to invest your pension pot on a regular basis then maybe someone like abrdn might be a good bet. But if it's a case of putting it in and leaving it then I'm not sure why you would want to pay anything more than the bare minimum.

@cjr thanks for the heads up on the II fee structure, am on Vanguard and also very happy but could see in the future that I would save a bit of money going to a monthly charge, will DM

Yes indeed, I do want to add contributions regularly, rather than just leave it.

Could you expand a little on why abrdn might be good in that situation? Apologies, I'm a real SIPP rookie, but looking to learn.

Until now I'd just done a workplace pension, but after seeing an IFA for a couple of reasons, they come back with a recommendation to move my current pot to a SIPP, add a one-time contribution, and then assess again next financial year.

I believe the plan is then to regularly move between my workplace pension and the SIPP. This way I keep the employer contributions, but move over to a place where the IFA believes they can get a better return on my money than a workplace pension scheme.

Did you get an answer on why the withholding is 53% ?

I wasn't meaning adding contributions, I mean changing the funds you want to invest your pension in. I don't know if abdrn might be good if you wanted to do that, more that I would imagine they and others sell themselves on having higher fees by making it easy for you to regularly make active investment changes. I don't, I have just put into ETF and leaving it, hence I don't need to pay more for 'services'.

re your other points, I combined 3 separate historic work pensions into one SIPP, but my current work pension scheme is with a different provider. There's no option for me to get work to put it into my SIPP unfortunately which I think is not uncommon. If/when I leave I'll put it into my SIPP where I have control over it.

Sorry, I totally see where I misunderstood what you meant. My mistake.

Well the IFA wants to invest 100% in their own firm's fund, which is regularly changed and updated to make sure it meets the risk profile. As such, I don't imagine they're going to be changing the investments regularly, if at all.

Their advice is certainly not adding up the more I learn on the subject. Hopefully they can clarify when we meet. If not, I will not be moving forward with their recommendation!

IFA wants to invest 100% in their own firm's fund

Err.... Right.

Assume they are a commission based IFA?

Could I ask how long you have before you want to draw a pension from this SIPP?

Yep. Talking to my wife about it this afternoon (I'm off sick, she's on maternity leave), we are both feeling increasingly bad about this. If I can't understand how I'll be better off via their advice, but I can clearly understand how they'll be better off, it feels like I should run a mile.

I'm tempted to ring him up and ask him to explain why he's recommended that SIPP and that fund, rather than wait a couple of weeks and spend the time going to meet at their offices.

I'm 34, so absolute minimum age to take pension being 57 under current rules, I think at least 23 years, but likely more like 30 years.

Do you remember what the cutoff amount invested is to make it worth the switch from Vanguard to II?

Ok, based on your pot size I would suggest II is the best platform and based on your age I would suggest a low cost 100% global equity tracker

Basis for fund is here: https://monevator.com/why-a-total-world-equity-index-tracker-is-the-only-index-fund-you-need/

Answer to which fund specifically is HSBC FTSE All-World Index Fund C from here: https://monevator.com/best-global-tracker-funds/

£115k

Thank you 👍🏻

Thank you very much, that's very kind of you to give me specific advice.

Yes, backup plan if I don't like the answers from the IFA was to keep my company pension where it is (it's actually done fairly well, up 29.5% over 5 years), put the lump sum I need to add this tax year into my own SIPP, and then put it into some sort of global tracker fund, or perhaps spilt across a small number of global tracker funds to diversity a little.

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hsbc-ftse-all-world-index-class-c-accumulation/charts

70% over 5 years……

Regarding diversification, have a look at what specific companies the global trackers are invested in before you spread your money around. You’ll see that a lot are invested in the same ones.

I got in touch with HMRC recently to claim higher rate tax relief on my pension contributions. Unless I'm mistaken about how this stuff is calculated they've massively short-changed me, but am struggling to figure out how I can resolve it without employing an accountant.

Regarding private pension contributions, I get the 20% basic rate relief applied automatically but should I still expect another 20% back?

When I put the numbers into this calculator it says "As a 40% higher rate taxpayer you can claim back up to an extra £****"

The amount corresponds to 20%, but I don't understand when 'up to' might mean less than that.

If you put it in a SIPP or similar, the SIPP provider will have claimed 20% back for you and added it to your total. HMRC will then give you the other 20% back as rebate or offset it against other tax you have to pay.

But if you earn 60k for example and put 20k in a pension, you will get 20% of it added to your SIPP, but only get the extra 20% rebate on the amount over £50,200 that you paid 40% tax on.