Focus on Pensions - March 2012
Charges are in the spotlight at the moment, be it fund manager fees or the price put on administering a pension, they are all coming under fire.
Headlines are filled with comment on charges robbing funds and impacting on the real returns investors get, particularly when the compounding effect of them is taken into account.
Most recently the National Association of Pension Funds commissioned research by the Pensions Policy Institute that showed the real impact of charges on funds.
It showed that those in stakeholder pensions, paying 1.5% pa for the first 10 years and 1% pa thereafter, would have to work for three years longer to accumualte the same pot as if they were paying 0.3% pa in charges.
When put into these terms it shows how often-overlooked issues like annual management fees can impact in a very real way.
That is why our surveys look at a mixture of performance, capabilities and cost.
However, conflicting this in the SIPPs market is the argument that cost should not be the main driver for selecting a plan, but rather the capabilities and financial strength of providers, alongside the product having the right features for the individual.
This does not mean that cost is not up for debate in the SIPPs market, as most recently claims have been made that some clients have been missold the products, as they only use the functionality of a personal pension but pay the higher costs of a SIPP.
The argument is that they are paying top whack for a product offering full investment flexibility, when all they use is the standard few OEICs.
SSASs are also no stranger to the cost debate, but it may be something that actually aids the matket this year. Many predict that the lower cost of a SSAS rather than a number of SIPPs means that the product will boom in 2012.
While some are predicting SIPPs-like growth in the SSAS market, this seems unlikely. However, that does not mean to say that the sector is not going to see a huge pickup in interest this year.
Following on from the Money Management survey on personal pension charges last month, we take a look at the performance of personal pensions, seeing how each provider has fared.
Such a focus on costs and suitability of products can only be a good thing for end consumers and this supplement aims to aid advisers in informing their clients.
IN THIS REPORT
With the SIPP market continuing to grow and current debate focusing on the boom in platform and simple SIPPs, Laura Suter surveys the market
With thousands of fund choices available in personal pensions, it is a wonder this market is losing ground to SIPPs. Geordie Clarke finds things to...
Growth is picking up in the SSAS market, with many predicting double digit growth that will eclipse the SIPP market. Laura Suter looks at whether...
Choosing the right retirement product for a client is one of the hardest decisions an adviser will face when constructing a portfolio. Gareth James...
Could 2012 really see a round of SIPP providers squeezed out of business by regulation? Greg Kingston looks at the key influences advisers need to...
The Government has become wary of retirees falling back on the state, but has it gone too far and put people off savings for retirement? Robert...