These IFA charges seem a little heavy

For an income drawdown account 5.6% setup and 1.5% per year. I have

150,000 fund. That's 8,400 setup and 2,250 per year. I checked out "sippDeal" web site and unless I've missed something they charge 150 to set up an unsecured pension and 10 per pension payment and 75 per review.

The way I look at it, if I gave my money to sippDeal they could "lose"

10,000 in the first year and I'd still come out on top.

Please tell me if I have completely misunderstood these charges.

Also if it's possible to do a "DIY" income drawdown scheme could you point me to a standard check list if this has already been done.

Thanks

Mike

Take a look at

they may be even cheaper than sippdeal

Does the IFA's fee include adviuce on what shares to buy? Sippdeal is, AFAIK, an instruction only service, offering no advice on what to buy.

While on this topic, make sure you fully understand what happens if you die while the SIPP fund is in drawdown.

Robert

In message , snipped-for-privacy@hotmail.com writes

Are you sure that are her actual charges? or are they the charges shown on the IDD? The two arent necessarily the same.

What does IDD stand for?

For an income drawdown account 5.6% setup and 1.5% per year. I have

150,000 fund. That's 8,400 setup and 2,250 per year. I checked out "sippDeal" web site and unless I've missed something they charge 150 to set up an unsecured pension and 10 per pension payment and 75 per review.

The way I look at it, if I gave my money to sippDeal they could "lose"

10,000 in the first year and I'd still come out on top.

Please tell me if I have completely misunderstood these charges.

Also if it's possible to do a "DIY" income drawdown scheme could you point me to a standard check list if this has already been done.

Thanks

Mike

If you take advice, then you have to pay for that advice. This means that the advisor has to carry the can if the advice is wrong. If you do your own thing, then you cannot blame anyone if it goes wrong. Are you sure you know the pension and tax legislation well enough to make your own decisions to have an income drawdown plan in the first place?

If you died the day after setting this up then your estate might have to pay

52,500 in tax. Are you OK with this? You've only quoted a 10K loss in your post.

BTW, when I say 'going wrong' I don't mean funds going down when you hoped they'd go up. I'm talking about things like an income drawdown plan being a bad idea for you - for example.

If you're happy with all this then you don't need to pay for advice.

Rob Graham

i.e. equivalent to a 65% surviving spouse annuity, not too unreasonable, but as you rightly say the OP ought to be aware of this.

In message , GB writes

Initial Disclosure Document, it contains amidst a mass of confusing supposed information the maximum that the IFA may choose to charge.Note the word 'maximum'.

I thought this only applyed if the spouse was to take the money out of the pension. I thought that she could inherit the pension and still receive the monthly income without penalty.

Mike

"Miss L. Toe" wrote

Eh? In the first scenario, you lose 35% of value on an "immediate death".

But if you had an annuity with 65% to surviving spouse, the "immediate death" does *not* lose 35% of the full value. It only loses the 35% for the period upto "expected death of first life" - not for the entire period upto death of second life!

In other words, suppose you expected the first life to live for 20 years and the second life to live for another 10 years after that. You "expected" (say) 10,000pa for 20 years then 6,500pa for 10 years. But with "immediate death", you actually only get

6,500pa for 30 years. To be equivalent to losing 35%, you'd need to get 6,500pa for 20 years then 4,225pa for 10 years. See?

Never trust and IFA - they will only ever advise you a deal that gives them the biggest kick. HTH Tro

Eh Eh ?

I was thinking of an annuity where the joint life gets says 10k pa and after one death the income drops to 6.5k pa

That is a 35% loss of income on the first death. Which (to my way of thinking) is a 35% loss of value.

Well if you want to make things complicated, and talk about the 'value' of the underlying funding of the annuity that cannot be realised, then I guess you are technically correct.

I was trying to keep things simple and say that a drop in income of 35% after one death was a fairly normal sort of thing to plan for with an annuity and therefore should not in any way be considered an unreasonable thing with income drawdown.

You mean, she comes to you, not you to her?

Although I will not comment on the hourly rate that this adviser has quoted, I cannot accept that 45 minutes is all that it would take her to do wht you need. She's going to have to do a factfind, do some reaearch, write you a proper letter, deal with the money laundering paperwork, arrange the contract, arrange the investments within, etc. In 45 minutes?

Indeed, SIPPS are not regulated products, although the investments within them probably will be.

No, it's not rocket science, but there is legislation surrounding pensions and if you don't know what you're doinjg you may get it wrong. But maybe you do know, in which case, fine. It's easy to ride a bicycle if you know how, but impossible if you don't.

The residual fund is subject to 35% tax charge if the cash from it is taken.

Maybe you'de be better off with phased retirement. Who knows? I don't. But I don't know your circumastnaces and I don't know what the reasons are for your wanting income drwdown.

Rob Graham

[snip]

You've checked out all of them ?