Get up to 125,000 Virgin Points by transferring a pension to Virgin Money

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• Dubious says:

  10 Jul10 July 05:12

  Does the pension being transfer need to have been opened for a minimum period of time?

• TimM says:

  10 Jul10 July 06:20

  The fees appear to wipe out any benefit.

• CarpalTravel says:

  10 Jul10 July 06:22

  Discussed previously here: https://www.headforpoints.com/forums/topic/virgin-red-125-000-points-move-pension-offer/

  • Andy says:

    10 Jul10 July 08:26

    Yeh, it’s such bad value for money…

    HFP frequently has articles on the value of loyalty points from various schemes perhaps they should be more explicit about what at 0.75% / year charge costs in real money

    • memesweeper says:

      10 Jul10 July 08:58

      £ 750 in the first year for a £ 100k pot? please correct me if I’m wrong…

      If someone is already on a low-effort platform with fees at (give or take) or above these rates and wants to stay on a low-effort platform it’s hardly a rip-off. Obviously, consider your choices after the first year for lower fees and/or switching incentives.

      Note I am not a pensions adviser (and if I were, my advice would probably be more expensive than £ 750 🙂)

      • John says:

        11 Jul11 July 04:14

        If you invest £100k in a fund which grows by 6% every year for 20 years, you would end up with £320714.

        If the fund fees are 0.25%, the growth is actually 5.75%, and you would end up with £305920.

        If the fund fees are 0.75%, the growth is actually 5.25%, and you would end up with £278254 after 20 years.

        This is £27666 less than the 0.25% fee scenario, or a flat £1383 per year rather than merely the £500 difference of the first year.

        It’s even worse when you consider the effect of making more contributions during your working life and your salary increasing from career progression.

        • memesweeper says:

          11 Jul11 July 10:08

          True — and why I have a SIPP populated with ETFs plus some real shares.

          Despite my best efforts most of my friends with non-company pensions are on higher cost pensions as they want the (perceived) security blanket of a low-effort system.

          For these people a Virgin pension may make sense, and the incentive is potentially useful.

        • Rob says:

          11 Jul11 July 10:15

          My wife and I have maxed out pension pots sitting with Aviva at 0.75%. I’m also the only person left in West London who hasn’t put all their cash savings into short term gilts.

          It’s the general trade-off between using time to make money and using time to save it. Overall I seem to be better off putting my resources into growing this thing.

• Charlie says:

  10 Jul10 July 06:22

  Fees on this a total rip off compared to somewhere like Vanguard that charges 0.15%, capped at around £400. Even Hargreaves is much less than this.

  Hopefully nobody is duped by this “oh look, £1250 of points!!” offer to have their pension hosed on the fees for many years.

  • VinZ says:

    10 Jul10 July 08:39

    I love Vanguard, they never have offers or promotions but their fees are very low.

• MSHORT says:

  10 Jul10 July 07:22

  Do not do it!
  I took ‘advantage’ of the 50K ISA transfer from Hargreaves Lansdown.
  Virgin have been completely useless and mucked up the transfer.
  Their customer service is worse than useless.

  • Red Flyer says:

    10 Jul10 July 08:51

    The bulk of transfer admin is from ceding party and not receiving party in this scenario. The physical transfer is simply done online using a system called Origo, so if any delay it will likely be down to HL and not necessarily Virgin as they are beholding to HL in terms of what they can do and when.

    • MSHORT says:

      10 Jul10 July 20:00

      It was not Harreaves Landsdown , Virgin mucked up the transfer, took a month to correct it and its still not right!

• Matthias says:

  10 Jul10 July 07:30

  Thanks for the pointer to the old discussoon, very helpful.

  I don’t really understand the whole bid/offer spread thing, but from a pure fees perspective would it not still be attractive if you transferred the money for the minimum period?

  It need only stay in there for 4 months (mid August to 20 December) so vs a 0.25% fee you are only overpaying by £167 per £100k for that period – ?

  • Ken says:

    10 Jul10 July 08:48

    The price to buy a share, investment trust or ETF will be slightly higher than the price you would get for selling it. This is referred to as bid / offer spread.
    So there may be a cost in liquidating one pension to transfer to another provider.

    Additionally there will normally be dealing charges to buy and sell.

    Then there is the risk that during any transfer you are ‘out of the market’, and while this can work both ways , it’s not desirable.

    Then there is the fact that Virgin charges are higher than other providers.
    Then there is the fact that Virgin offer a very small range of choice, which historically underperforms.

    Then there is the whole ‘lads it’s Virgin’, risk of general incompetence.

    My heart sinks a little time every time I see one of there offers from Virgin or Nutmeg or whoever with people trying to jump through hoops trying to justify it to themselves.

    You will find people no doubt far more knowledgeable than me saying don’t do it, but seemingly people want not to listen.

    • Tariq says:

      10 Jul10 July 10:55

      Thanks for the explanation, did wonder if there was a value risk as a result of sell/buy.

  • AJA says:

    10 Jul10 July 08:58

    But is it really worth it to do this for just a few months?

    Bear in mind this Virgin pension is not a SIPP so you don’t choose what you’re invested in and you might have trouble moving to another pension next year.

    Also bear in mind the Regulation states that Your current pension provider must transfer your pension across within six months. However, during this time you may be exposed to fluctuations in the value of your pension. While being transferred, your pension isn’t invested.

  • Red Flyer says:

    10 Jul10 July 08:59

    Wish people would not focus so much on fees in isolation. Vanguard are cheap as they offer passives. An active managed option might charge more, but if it outperforms when doing so by more than the fee difference, then that is what you should be more interested in! I would not mind paying 1% to get 6% pa compared to paying 0.22% and getting 3% pa in comparison.

    • AJA says:

      10 Jul10 July 09:18

      I agree you should not be fixated on charges in isolation as you illustrate but what would be worse is being charged 1% and only getting 3% return when you can achieve the same for a fraction of the charges.

      The key thing is whether you’re happy for someone else to decide what you’re invested in which is what you’re paying for with this Virgin pension which is not a SIPP.

      I think you could pay a good IFA to effectively manage your investments but invest in a SIPP with all of the benefits that SIPPs offer.

    • Ken says:

      10 Jul10 July 09:58

      Except it’s guaranteed to charge more.

      It’s also more likely than not to underperform.

    • John says:

      11 Jul11 July 04:05

      The majority of active fund managers perform worse than any passive benchmark, even before fees are taken into account

      If you are lucky enough to continually pick the active funds which outperform then you may as well use your luck on picking stocks yourself

• Gordon says:

  10 Jul10 July 08:20

  Hargreaves Lansdown? Any recommendations for an ISA transfer to these, from my current provider.

  • VinZ says:

    10 Jul10 July 08:38

    There was a good offer that appeared on MSE a couple of weeks ago.

  • AJA says:

    10 Jul10 July 08:38

    Are you asking whether HL is a good place to transfer an ISA held elsewhere?

    If so, I think they’re good although they charge 0.45% so not the cheapest. The Web site and app are good and easy to navigate. It really is a platform designed for those who are happy to choose their own investments but they do offer financial advice (for a fee) and also do have their own HL plans if you’re happy for them to make the decision about which funds you’re invested in.

• Gordon says:

  10 Jul10 July 08:50

  Thanks @VinZ
  @AJA that is what I meant, thank you for the info.

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