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Vanguard launches drawdown for Sipp clients

Vanguard launches drawdown for Sipp clients

The Vanguard personal pension is now open to those looking to take payments from their pot, after launching earlier this year.

The investment giant launched its “low cost” pensions offering in February although it was originally meant to launch in May 2017 when its investment platform, which also offers an Isa, Junior Isa and general investment account, went live.

The Sipp has an annual account fee of 0.15 per cent, which is capped at £375 a year and applies across all an individual’s holdings on the Vanguard Investor platform.

According to Vanguard, its drawdown service comes with no additional charges.

Sean Hagerty, head of Vanguard, Europe, said: “An individual’s savings often represent a lifetime’s effort, yet too many retirees continue to lose out on their own hard work to high fees and charges. Fees can have a sizeable impact on investment returns, and consequently on quality of life in retirement.

“Particularly in a time when economic conditions might be difficult, investors are best served by focusing on what they can control. Nobody can control the markets, but they can control what they pay to invest.”

Vanguard had commissioned Platforum to calculate the Vanguard Personal Pension’s competitiveness compared with Sipps offered by 13 other platforms, across a range of investment scenarios

This found that an investor in drawdown with the median UK pension pot of £210,000 has the potential to save £7,168 more through the Vanguard Personal Pension versus the highest cost drawdown provider on the market, over ten years.

Many advisers criticised Vanguard’s offering when it first launched saying it should not be labelled as a Sipp as clients are only able to invest in the firm’s own funds.

Clients have access to 78 diversified funds and exchange traded funds including Vanguard’s LifeStrategy and Target Retirement Fund ranges.

Advisers complained the term 'Sipp' had been attached to many products that allow members to choose where the funds are invested but in reality they are the simplest of personal pension schemes.

amy.austin@ft.com

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