Paying a lump sum into a pension to lower 2017 tax

Henry Ford III

Heres Johnny wrote:

If you dont want to pay anyone anything at all and are well able to control your own fund, what you want is a small self administered scheme. See how you get on with that. Have a Google.

SSAP's are frighteningly expensive.

St1mpMeister

Heres Johnny wrote: »

If you dont want to pay anyone anything at all and are well able to control your own fund, what you want is a small self administered scheme. See how you get on with that. Have a Google.

I'd prefer to involve one of the big insurance companies like Zurich.

I guess I'm asking, what service does a broker (read financial advisor) offer that I would find valuable (apart from the 0.75% annual management fee for the Zurich pension)?

- Choosing which fund in Zurich to go for? I'll probably just decide on that myself when presented with the list

- What mortgage to go for? Already done

- Health insurance? I'll handle that

- Savings? Already well on top of it

- What tax breaks I'm eligible for? Checked that box


What other service am I missing that I would find useful? I've no problem paying out for something that will really benefit me going forward, so would rather ask here than grill the broker.

Heres Johnny

I prefer the tied agent model having worked both as a tied agent and in a brokerage. You have to pay someone to sit down with you, advise on it and set you up whether that's a broker or a tied agent. And to meet with regularly and make changes.
Broker or tied agent from Zurich sales team , your choice. Don't dismiss the value of good solid ongoing advice so go wherever you think you'll get that for the price you want to pay.

St1mpMeister

Heres Johnny wrote: »

I prefer the tied agent model having worked both as a tied agent and in a brokerage.

Really? OK that's different to what Henry was saying, is there a benefit to going to a tied agent (assuming I know now I want to go with Zurich)?

Heres Johnny wrote: »

You have to pay someone to sit down with you, advise on it and set you up whether that's a broker or a tied agent. And to meet with regularly and make changes.

So making changes to a pension involves going in to discuss with the broker/agent? Is it not like making changes to your mortgage where you can just ring up over the phone?

Are there normally costs involved in making changes to the pension fund for example?

Making changes to mortgages/insurance/savings usually incurs no fee and can be done over the phone/internet.

Heres Johnny wrote: »

Don't dismiss the value of good solid ongoing advice so go wherever you think you'll get that for the price you want to pay.

It's certainly good to have another outlet for advice, but I just usually spend a week researching on Google and posting questions on AskAboutMoney / Boards to get feedback.

If I went down the route of broker, would they normally expect payment for this kind of advice, or is it only major work that would be costed?

In most circumstances I think I could get the advice I need just with a bit of time and effort on my part.

St1mpMeister

I was sent an updated list of options between Aviva and Zurich based on Lump Sum payment and ongoing monthly pension payment...

Lump sum payment (to cover 2017)

AVIVA|ZURICH
Allocation of 100%|Allocation of €105.5%
Fund Management Charge for Multi Asset Fund = 0.7% per annum|Fund Management Charge of 1% per annum
Early encashment charge = Year 1 = 5%, Year 2 = 4%, Year 3 = 3%, Year 4 = 2%, Year 5 = 1%|Early encashment, Year 1 = 5%, Year 2 = 4%, Year 3 = 3%, Year 4 = 2%, Year 5 = 1%
No policy fee|No policy fees
No fund switch charges|No fund switch charges for first 4 switches in a year



Regular monthly payment

AVIVA|ZURICH
Allocation of 100%|Allocation of 100%
Fund Management Charge for Multi Asset Fund = 0.7% per annum |Fund Management Charge of .75% per annum
Early encashment charge = nil|Early encashment, Year 1 = 5%, Year 2 = 4%, Year 3 = 3%, Year 4 = 2%, Year 5 = 1%
No policy fee|No policy fees
No fund switch charges|No fund switch charges for first 4 switches in a year



To me Aviva looks better?

Henry Ford III

Heres Johnny wrote: »

I prefer the tied agent model having worked both as a tied agent and in a brokerage.....

The quality and depth of advice simply cannot be as good with a tied agent.

In terms of the food chain of quality the pecking order is:-

1/. Broker. Ideally an Authorized advisor (which allows advice be given on products where advisor doesn't have an agency). See the Central Bank registers. Required to give "best advice".

2/. Multi Agency Intermediary. Can only advise or comment on the products of providers with whom they hold an agency.

3/. Tied Agent. Can only comment on products from a single provider (regardless of whether or not they are even competitive).

Grassey

St1mpMeister wrote:

Are there normally costs involved in making changes to the pension fund for example?

Some places will allow you 3 free switches a year, then €60 a pop after that. So if you are planning on reviewing monthly and balancing your funds it could get pricey.

ANXIOUS

Henry Ford III wrote: »

SSAP's are frighteningly expensive.

You keep telling people that and it's not necessarily true all depends on scale.

Henry Ford III

ANXIOUS wrote: »

You keep telling people that and it's not necessarily true all depends on scale.

True but for the average income and at an average rate of contribution they are prohibitively expensive.

ANXIOUS

Henry Ford III wrote: »

True but for the average income and at an average rate of contribution they are prohibitively expensive.

You can get it done, if you've no property for €1500 plus vat inclusive of trustees and pension board, if you'd €200k at 1% AMC you'd need to start having the discussion about a SSAP if you could get a sponsoring employer.

Henry Ford III

ANXIOUS wrote: »

You can get it done, if you've no property for €1500 plus vat inclusive of trustees and pension board, if you'd €200k at 1% AMC you'd need to start having the discussion about a SSAP if you could get a sponsoring employer.

3 year actuarial valuation too. That aint cheap.

St1mpMeister

St1mpMeister wrote: »

I was sent an updated list of options between Aviva and Zurich based on Lump Sum payment and ongoing monthly pension payment...

Lump sum payment (to cover 2017)

AVIVA|ZURICH
Allocation of 100%|Allocation of €105.5%
Fund Management Charge for Multi Asset Fund = 0.7% per annum|Fund Management Charge of 1% per annum
Early encashment charge = Year 1 = 5%, Year 2 = 4%, Year 3 = 3%, Year 4 = 2%, Year 5 = 1%|Early encashment, Year 1 = 5%, Year 2 = 4%, Year 3 = 3%, Year 4 = 2%, Year 5 = 1%
No policy fee|No policy fees
No fund switch charges|No fund switch charges for first 4 switches in a year



Regular monthly payment

AVIVA|ZURICH
Allocation of 100%|Allocation of 100%
Fund Management Charge for Multi Asset Fund = 0.7% per annum |Fund Management Charge of .75% per annum
Early encashment charge = nil|Early encashment, Year 1 = 5%, Year 2 = 4%, Year 3 = 3%, Year 4 = 2%, Year 5 = 1%
No policy fee|No policy fees
No fund switch charges|No fund switch charges for first 4 switches in a year



To me Aviva looks better?

Grassey wrote: »

Some places will allow you 3 free switches a year, then €60 a pop after that. So if you are planning on reviewing monthly and balancing your funds it could get pricey.

Right, so in the above choices, Aviva don't charge for the switches, whereas Zurich allow up to 4 free switches. So again Aviva wins out here?

The main difference between Aviva and Zurich seems to be the 100% vs 105% allocation difference on the lump sum. What does that mean? Is 105% better?

Also apart from the charges, are the choice of funds going to be very different between Aviva and Zurich? Are either company known to have better performing funds?

Thanks for all the help to everyone in this thread btw, I'm now advising my siblings on their own pensions thanks to your comments

Heres Johnny

Don't try to constantly switch funds. Are you trying to consistently time the market? Over 30 years? Pensions are about taking advantage of long term averages and that's what your annual management charge pays for is a fund manager to move your money around you could lose your bollox doing it yourself

Yes 105 is better

Zurich and Aviva and all the others have loads of funds depending on what suits you and some will be better in Zurich, some in Aviva. Some will be better in other companies than both Zurich and Aviva. But they are past performance in effect they are returns thst you have missed.

Don't be advising your siblings you don't know enough you just asked if 105% allocation rate is better than 100%. You have no more business doing that than rewiring their house if you are not an electrician

St1mpMeister

Heres Johnny wrote: »

Don't be advising your siblings you don't know enough you just asked if 105% allocation rate is better than 100%. You have no more business doing that than rewiring their house if you are not an electrician

I know enough to be able to advise them about the basics.... sheesh no need to take offence.

For example I started this thread knowing nothing about pensions, now I know you can use it to offset your taxes etc.

Anything deeper that I don't know about, I can let them know I don't know about it. Chill

ANXIOUS

Work out how many years it'll take for the increased AMC to catch the increased allocation.

digzy

St1mpMeister wrote: »

That's fine, so these kinds of things aren't easily answerable?

I'll go Financial Advisor if it's really necessary, but I thought the questions were straightforward yes/no types


They are but fellas here love speaking in riddles!

St1mpMeister

digzy wrote: »

They are but fellas here love speaking in riddles!

I got there in the end... took over 100 posts but I got there!