Everything You Need To Know
- The Three Efficiencies – Costs, Tax, Time (or hassle)
- Cost vs Value – Absolute rock-bottom prices are not always desirable. Defining value is subjective.
- The levels of costs – Fund, Platform/Account, Advice.
- Fund charges expressed in the OCF (Ongoing Charge Figure), see also past iterations: AMC (Annual Management Charge) and TER (Total Expense Ratio). Investment terms explained.
- OCF still not complete – transaction costs often expressed separately, can be negative costs!
- Platforms – account fees, transaction/dealing fees, admin fees – percentage and/or flat fees, can be mixed.
- Advice – usually percentage-based.
- The impact of costs – Costs compound, just like investment gains. Investing £250 per month for 40 years at a 6% return would yield £479,242 with no costs. With a 1% annual charge on the pot, you would end up with £372,136 A 2% charge on the pot ends up with £291,214
Everything You Need To Do
- Decide whether you’re going to go it alone, seek advice or something in between. Advice is more flexible than it used to be.
Enquiry form to Jacksons. - If going solo, pay attention to platform and fund costs. Example: HL at 0.45% vs Interactive Investor at £4.99 a month for the first £50,000. You’ll be better off with II’s fixed fee if you have more than £13,306 invested.
- Tax is a cost – pay as little as possible. Planning can show the impact of tax and the differences a decision can make.
- Don’t leave money languishing. Be intentional. Review your existing provision – just because it was the best last year, things may have changed. Podcast: Simplify Your Pensions
News: Book 2 is finished! The Meaningful Money Retirement Guide. Anticipated release in Spring/early Summer 2025 – published by Harriman House.
