Investment giant Vanguard is set to enter the self-invested personal pension market early next year as it launches its 'low cost' offering two years later than planned.
In an email to investors, sent out yesterday (December 1), Vanguard apologised for delays to the launch of its personal pension product but said it would now launch in early 2020.
The investment giant originally said the Sipp would be available with the launch of its investment platform in May 2017, which also offers an Isa, junior Isa and general investment account.
In the latest email Vanguard said: “We know you have been waiting a long time for news of our self-invested personal pension and we want to thank you for your patience.
“The good news is that we can now announce details of the Vanguard Personal Pension ahead of its launch in early 2020.
“We are sorry it has taken longer than expected, but we have taken time to build a simple, transparent option for your retirement savings that delivers exceptional value for money.”
The Sipp will charge an annual account fee of 0.15 per cent, which is capped at £375 a year.
The account fee and cap will apply across all an individual’s holdings on the Vanguard Investor platform.
Alongside the account fee, investors will be charged a fund fee and fund transaction costs but there are no other fees for set up, transfers in or out, or exit charges.
Vanguard stated: “It can be difficult for investors to understand exactly what they are paying for with a Sipp, so we wanted our pricing to be as clear as possible.
“On top of our account fee, you will pay fees for the funds in which you invest within your pension and also fund transaction costs but there are no other fees.”
There will also be no additional charges for individuals entering drawdown but this option will only be available from the 2020-21 tax year.
The minimum investment is £100 a month, before tax relief, or a lump sum of at least £500.
Sean Hagerty, head of Europe at Vanguard, said: “The Vanguard Personal Pension is designed to reduce the cost and complexity of saving for retirement.
“An individual's savings often represent a lifetime's effort, yet many investors and retirees continue to be charged far too much on the proceeds of their own hard work.
“Fees can have a sizeable impact on investment returns, and consequently on the quality of life in retirement.”
amy.austin@ft.com
What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.
