Fangoria

iTrader: (1)

Currently am paying into a Stakeholder pension and have been putting money away for several years into this and have paid over £100k in that time.. (I have about 5 other closed pensions but 3 of these are defined benefit in secure companies so wont touch these)

Being in a Global role I think that AsiaPacific is going to perform well over the next 5-10 years (but I'm not offering advice on that matter!) so want my pension to be heavily biased towards Asia (exc Japan)

My current stakeholder and many schemes I've seen dont seem to give even the simplist of flexibility to give a blanket investment biased towards Asia so I've just started reading up on SIPP's

I thought it would be easy to switch to something like a simple SIPP and then start to divert funds to specific funds specialising in Asia - I really want some advice in this area but one fund advisor charges 5% of the total fund amount for that advice

Is this normal - seems very high to me?.. dont really want to be paying £1000's for advice..

Dingdongler

Almost all private pensions are a rip off in my very humble opinion.

If you are in a 'global role' pick a city in one of those asia pac countries you believe in and buy a flat/land there.

thesyn

As above.
You are brave as hell!

(5% does sound high, I will flip a coin for you for less!)

Gordo

Fund charges are the next thing to be exposed (hopefully!). Good article on the impact here:

http://blogs.telegraph.co.uk/finance...ement-charges/

For higher rate tax payers (i.e. most people?), pensions are increasingly a bad idea. Max out on your annual ISAs and manage it yourself, perhaps (e.g. invest in Asian trackers or ETFs?).

5% is taking the p1ss. I'll bet there's also an annual fee (transparent plus hidden - from memory the average that 'funds' charge is a transparent 1% pa plus another 0.5%-1% in hidden goodies such as audit fees etc they can pump through).

Good luck

Gordo

Trout

iTrader: (1)

SIPPS are entirely different legal structures to normal pensions.

My current pension I am topping up has a 0.25% AMC and quite a bit of flexibility (although not a pure Asia investment option that I am aware off).

True SIPPS offer almost infinite flexibility, but as such are also infinitely customised to your personal needs and require regulatory compliance. That costs.

Maybe 5% is a little high, but you will pay at least 3%.

I would suggest, ISAs, Bonds and property*


Although local taxes and limitations on moving capital gains outside the country could kill off property as a sensible option.

EddScott

Fangoria - for the most part, you don't need to have a SIPP in order to invest in funds that invest in Asia.

The problem you have is that in order for a pension to keep its "Stakeholder" status it has to keep its charges low which limits the funds available.

There are a number of "Wrap" platforms available these days which will allow you to pretty much put they money where you want. We particularly use Transact but you could probably do it direct with say Hargreaves Lansdown (although personally I would avoid HL)

The 5% probably refers to the adviser charge for dealing with the transfer to the SIPP. 5% is high, our maximum is 3% and is usually lower.

This charge is seperate to the investment fund charge and the pension provider charge. Fund charges can be excessive and are completely out the hands of the adviser. Usually the better the fund, the more you pay - you get what you pay for effectively. But even so some are a bit too high.

You could use ETFs as they are very cheap (they don't have a fund manager as such but they also don't have the same type of protection a Unit Trust fund has). ETFs are a way of keeping costs down but you really shouldn't let the worry of cost guide your investment decision - again you get what you pay for.

Fangoria

iTrader: (1)

ES and others

Thanks - I need to read the responses again
The 5% was advice from HL on their site

This is before any annual charges (which are capped at £200 per year on the fund I would invest, i.e. over £80k at which point the charges cap out - at 0.5% so for me less than 0.25%) and specific fund charges

Gordo
The issue with Pensions is the annuity route and loss of capital if you die 6 years into your pension say.. however I see that for ones with annuity potential over £20k a year you can start to access the surplus capital in retirement or so I hear

The great thing about pensions is the 'up to 52% tax relief (or is it just the tax part?)' now on a Cap of £50k and then at the other end you can get 25% tax free lump sump
That means on £100 you can get this with a 77% tax break or top up.. thats amazing and whilst I think there will be huge changes to Pension legislation over the next 10 years I also think that the tax breaks will disappear.. its a case of maximise it while you can before it becomes the Aussie style scheme with less tax benefits

I really should max out on my ISA options (the limits are too low, even cumulatively over several years so I cant really be bothered with Isa's) and property.. though of course its best to keep a very diversified portfolio for risk/investment return and pensions are a large part of this that I want more control over

Dingdongler

How so? Between yourself and wife if you start maxing at an early age it can become quite a lot especially if you use the stocks and shares part.

And how does that apply to property?

Fangoria

iTrader: (1)

I'm talking about a balanced portfolio..including pensions, ISA's, buy to lets, premium bonds, etc

ISA's are better now because the allowances have increased, from £7k for ages, then £7.2k and now more recently to £10.2k - much better so yes thats £20.4k a year
They give the flexibility, as long as you dont ever cash them in, but I prefer to get the tax relief upfront via my salary - pensions offer me up to 62% tax relief up front (61% in current tax year).. though admittedly 52% as you would need to have gross earnings in the £100-£115k bracket in April 2011 onwards to get the 62% tax saving on a £15k pension amount.. due to loss of personal allowance). Its the lack of upfront tax savings which means I will put £50k a year (from April 2011) into a personal pension (rather than immediately think of Maxxing out on the ISA route), at least while I'm ordinarily resident in the UK.

Dingdongler

We all have different approaches but there is an old saying ' don't let the tax tail wag the dog'

I may very well be wrong but after having looked into this many times I always came to the conclusion that any tax benefits ( even if 50% payer) were outweighed by the downsides.

I have come away everytime feeling that financial advisors use this tax relief carrot to sell these things. They have tried to portray the size of this carrot as being even bigger now that some of us are now going to be paying tax at 50%.
But to me it still doesn't make sense.

Everybodies situation is unique and we don't know yours. Also as it stands I have a very good final salary public sector pension to provide a safety net which obviously affects my perspective.

Anyway, good luck because its actually quite a complex issue that needs alot of thought