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Vanguard’s new Sipp with a 0.15% fee is the UK’s cheapest pension

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Cut-price investing giant Vanguard has revealed details of its personal pension with a charge of just 15p for every £100 invested.

The launch early next year of a self invested personal pension (Sipp) by the US fund manager is highly-anticipated, as it first hoped to offer pensions shortly after bringing its DIY investing platform to the UK in 2017. 

With an annual administration charge of 0.15 per cent, capped at £375, Vanguard says its DIY pension has been designed to make saving for retirement simpler, whether people have just started saving or have been investing for decades.

The Sipp from the firm famed for its low cost tracker funds will be the the lowest-cost product of its kind, according to research from industry specialist Platforum.

Vanguard's new Sipp will be the lowest-cost of its kind, according to research from Platforum

Vanguard's new Sipp will be the lowest-cost of its kind, according to research from Platforum

Vanguard’s new Sipp will be the lowest-cost of its kind, according to research from Platforum

Investors will be offered 76 of Vanguard’s own-brand funds and ETFs and have to pay fund fees on top of the 0.15 per cent annual administration cost. 

Vanguard offers a range of low-cost tracker funds among its investments, including the popular LifeStrategy range that lets people choose how much risk they want to take and invest around the world 

The low charges would mean younger people at the start of their saving for retirement journey could save on fees, while those with more put aside for retirement could cut their costs by even more.

The account fee cap applies across all personal pension, Isa and general account holdings on the Vanguard Personal Investor platform – so those holding money in other types of account will benefit.

The Sipp will only initially be offered to those building up pension investments, rather than those drawing on them in retirement – a drawdown service for them should follow during the next tax year.

Vanguard says that for the average British pension saver it will be the lowest-cost Sipp on the market. The 0.15 per cent annual fee compares to a 0.45 per cent charge at Hargeaves Lansdown, 0.35 per cent at Fidelity, while Interactive Investor charges £19.99 per month.

Vanguard pension savers can invest from just £100 a month of a lump sum of at least £500.  

Sean Haggerty, 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. We want to offer investors the clarity, peace of mind and value for money they deserve, through a service that is simple, effective, transparent and fairly priced.’

HOW MUCH OF £100 INVESTED IS LEFT IN YOUR PENSION POT AFTER FEES? 
Annual management charge (%) How much you get after costs (%)
0.15
0.25
0.35
0.50
0.70
1.00
1.50
2.00
2.50
1 YEAR
99.85
99.75
99.65
99.50
99.30
99.00
98.50
98.00
97.50
5 YEARS
99.25
98.76
98.26
97.52
96.55
95.10
92.72
90.39
88.11
 
10 YEARS
98.51
97.53
96.55
95.11
93.22
90.44
85.97
81.71
77.63
 
20 YEARS
97.04
95.12
93.23
90.46
86.89
81.79
73.91
66.76
60.27
 
30 YEARS
95.60
92.77
90.02
86.04
81.00
73.97
63.55
54.55
46.79
 
Data assumes zero rate of return. Source: Vanguard   

Is Vanguard really the UK’s cheapest pension?

Trying to calculate the total cost of investing can be complicated as platforms use different pricing models and can have other charges beyond standard account fees, fund fees and buying and selling costs. 

Vanguard will charge 0.15 per cent annually as an admin charge, with fund fees paid on top, but there are no dealing charges. It only offers a limited own-brand selection of Vanguard funds.

The UK’s biggest investment platform Hargreaves Lansdown has a 0.45 per cent administration fee but offers a full range of funds, investment trusts and shares both in the UK and overseas. Hargreaves charges fund fees on top and has no dealing charges for funds but charges £11.95 to buy and sell shares, investment trusts and ETFs. You can read a full review of DIY investment platform charges here

Jeremy Fawcett, head of Platforum, said the Vanguard Personal Pension’s competitiveness compared with Sipps offered by 14 other leading platforms across a range of investment scenarios, makes it ‘one of the lowest-cost options on the market, especially for those at the beginning of their journey’.

The research consultancy found that a typical investor would pay £172 per year to invest a £40,000 annual Sipp contribution, compared to an average of £238 on competitor platforms, with the most expensive charging £396. 

Ben Yearsley of Shore Financial Planning said: ‘The Vanguard Personal Pension certainly is cheap, and if you go slightly off piste and don’t just plump for a FTSE All Share tracker, there are some interesting funds on offer. 

‘It’s a good option and will undoubtedly encourage those who haven’t saved in a pension before to do so, which is ultimately a good thing.’

The Sipp is aimed at pension investors building up pots, those who want to consolidate several pensions into one and the UK’s ever-growing self-employed workforce. With its low charges it has the potential to shake up the market by forcing others to assess their own fees and encourage a reduction in costs.   

Business

Govt will honour compact to give states their share of GST: Sitharaman

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Sitharaman’s statement comes after Kerala last week threatened to take the central government to Supreme Court over delay in the payment of compensation to states

BS Web Team  |  New Delhi 

The central government will keep its “compact” to give state their share of the (GST) though the cess collected has been inadequate, said Finance Minister on Saturday.

Sitharaman’s statement comes after Kerala last week threatened to take the central government to Supreme Court over delay in the payment of compensation to states. The finance ministers of Punjab, Kerala, Delhi, Rajasthan, Chhattisgarh, and Madhya Pradesh had met Sitharaman on December 4 and urged that funds due for four months since August be released as soon as possible.

“In the last GST collection, the cess fund wasn’t adequate (and) so the states didn’t get the 14 per cent compensation. When we collect the required cess, we will honour the compensation rate,” said Sitharaman at the Hindustan Times Leadership Summit in New Delhi.

It’s not that the compact (with states) has been broken. The compact will be honoured,” she said.

Cess collections under the GST to compensate states for revenue loss have fallen short of requirements in the current fiscal year on account of slowdown in demand. Under the law, if the states’ GST revenue does not grow by at least 14 per cent, the Centre pays them the difference after every two months.

The August and September compensation dues for Rajasthan are Rs 4,400 crore, for Punjab it is Rs 2,100 crore, for Delhi it is Rs 2,355 crore, for Kerala it is Rs 1,600 crore, and for West Bengal it is Rs 1,500 crore.

First Published: Sat, December 07 2019. 10:47 IST

Source: Business Standard

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Trump calls for World Bank to stop loaning to China, day after lending deal

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The World Bank on Thursday adopted a plan to aid China with $1 billion to $1.5 billion in low-interest loans annually through June 2025.

Reuters  |  Washington 

US President on Friday called for the to stop loaning money to China, one day after the institution adopted a lending plan to Beijing over Washington’s objections.

The on Thursday adopted a plan to aid China with $1 billion to $1.5 billion in low-interest loans annually through June 2025. The plan calls for lending to “gradually decline” from the previous five-year average of $1.8 billion.

“Why is the loaning money to China? Can this be possible? China has plenty of money, and if they don’t, they create it. STOP!” Trump wrote in a post on Twitter.

“World Bank lending to China has fallen sharply and will continue to reduce as part of our agreement with all our shareholders including the United States,” the World Bank said in an emailed statement to Reuters.

“We eliminate lending as countries get richer.” Spokespeople for the White House declined to comment on the record.

The World Bank loaned China $1.3 billion in the fiscal 2019 year, which ended on June 30, a decrease from around $2.4 billion in fiscal 2017. But the fall in the World Bank’s loans to China is not swift enough for the Trump administration, which has argued that Beijing is too wealthy for international aid.

First Published: Sat, December 07 2019. 09:11 IST

Source: Business Standard

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At least 4 killed after Saudi air force trainee opens fire at US naval base

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A member of the Saudi Air Force training to be a pilot opened fire in a classroom building at a US naval Station with a handgun, killing three people and injuring eight before being shot dead by police with officials investigating whether the shooting was an act of terrorism.

The gunman in the deadly shooting at Naval Air Station Pensacola in Florida on Friday was a second lieutenant in the Saudi Arabian military and was undergoing training to be a pilot.

He started his training in August 2017 as part of a three-year programme. He was taking classes in basic aviation, initial pilot training and English, a US military official told CNN.

Officials are looking into whether the shooting was terror-related as a possible motive.

The SITE Intelligence Group, which monitors jihadist media, identified the shooter as Mohammed al-Shamrani, and said that prior to opening fire he condemned America as a “nation of evil” in an online manifesto on twitter, according to media reports.

“I’m against evil, and America as a whole has turned into a nation of evil.” “I’m not against you for just being American, I don’t hate you because your freedoms, I hate you because every day you supporting, funding and committing crimes not only against Muslims but also humanity,” he wrote.

The ABC News reported that the Twitter account that posted the manifesto — which also condemned US support for Israel and included a quote from Al-Qaeda’s deceased leader Osama bin Laden — has been suspended.

Saudi Arabia’s King Salman telephoned Trump to denounce the shooting and said the perpetrator of the “heinous crime” does not represent the Saudi people, the official Saudi Press Agency said.

President Donald Trump expressed shock and grief at the incident and said he was personally monitoring the situation at the Naval Air Station Pensacola, that employs more than 16,000 military personnel and 7,400 civilians.

“King Salman of Saudi Arabia just called to express his sincere condolences and give his sympathies to the families and friends of the warriors who were killed and wounded in the attack that took place in Pensacola, Florida,” Trump said in a tweet Friday afternoon.

“The King said that the Saudi people are greatly angered by the barbaric actions of the shooter, and that this person in no way shape or form represents the feelings of the Saudi people who love the American people,” Trump said in his tweet.

According to local law enforcement officials, it all started around 6.50 am on Friday when reports of a gunfire at the naval base came and two county sheriff deputies rushed to the scene.

The two deputies were injured in the exchange of fire. While one received a gunshot in the arm, the other was hit in his leg. Six other people were also injured.

Police said shooting took place in a two-floor classroom building at the base.

The shooter used a Glock 9mm handgun that had been purchased locally, according to local media reports. He was killed after the two deputies exchanged gunfire with him.

The FBI is leading the investigation, as authorities did not rule out the possibility of it being a terrorist attack.

It was the second shooting at a Navy base this week. On Wednesday a US sailor killed two civilian employees and injured another before killing himself at Pearl Harbor Naval Shipyard in Hawaii.

“Saddened to hear of the horrible shooting at Naval Air Station Pensacola & continuing to monitor the situation. Praying for the victims & their families & we commend the first responders for their swift action in taking down the shooter & getting those on base to safety,” Vice President Mike Pence tweeted.

“This is a dark day for a very great place,” said Florida Governor Ron DeSantis.

Acting Secretary of the Navy Thomas B Modly described this as a “crime against all of us”.

“Our entire Navy and Marine Corps team is struck and deeply saddened by the attacks within our own naval family over the past several days, at Little Creek, Virginia last week, Pearl Harbor, Hawaii on Wednesday, and today in Pensacola, Florida. These acts are crimes against all of us,” he said.

First Published: Sat, December 07 2019. 08:33 IST

Source: Business Standard

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