People without a pension living in Ireland will be offered their style of Stakeholder pension. However, unlike the UK equivalent, there will be an upfront charge of 5% plus a 1% annual management charge. In the UK, the only charge is a 1% annual management charge, making them better value for money.
The Irish Pension Board will shortly approve these new pensions and they will work in a very similar way to those on the UK. Many UK managers have commented that the takeup of these pensions in Ireland is likely to be better than in the UK. This is believed to be because the extra 5% charge allows a reasonable level of commission to be paid to advisers with them not having to charge the customer a fee for advice, if they do not want to.
The option for an adviser to take commission or be paid by a fee is a choice all consumers should be offered. They should not be steered down one route. Choice and value for money is what matters.
Our View:
If you are buying financial products and receiving advice, make sure and check what you are being charged. If an adviser quotes you a fee for the advice and administration then this is all you should be charged. Make sure that any commission payable to the adviser is reinvested for your benefit.
Likewise, if you are not paying a fee and the adviser is taking commission, ask what the fee would have been and check the difference. Again, ask for any excess commissions to be reinvested for you.
Learn more about UK Stakeholder Pensions in the Stakeholder Cafe.com.
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