The Great Platform Rip Off - EXPOSED!

[@MrPhilHayward]

Thanks

[@chrisbourne-retirementplanner]

You’re welcome Phil.

[@phil1edinburgh]

Surely you should criticise HMRC. Why should Platform’s prefund - who would pay? their profit? Getting a better narrow buy-sell price would be better.

[@simonspencer3108]

Wow! You really raised the bar with thought - provoking content this time! Best video yet! A privilege to watch it and the”subscribe” joke was so good I Watched it 3 times… Cheers!

[@chrisbourne-retirementplanner]

Haha thanks Simon I’m glad you appreciate my comedy as well as my financial info 😆 I appreciate your support of my channel 👍🏼

[@matree.5407]

I came across you on a day I decided to learn about finance. You have been so helpful. Massive thanks to you.

[@chrisbourne-retirementplanner]

Thank you that’s really great to hear!

[@richardpaulhill]

Best finance youtuber👍

[@chrisbourne-retirementplanner]

That’s very kind of you to say Richard. Thank you!

[@matree.5407]

I would totally agree. I have learnt so much just this weekend when other KZbinrs have left me confused. Keep up the good work!!!

[@MrTpain1945]

Hi Chris 3.22 Which Advisor platforms do you recommend

[@chrisbourne-retirementplanner]

Hi there. I recommend a number of platforms for different circumstances, which all prefund… Abrdn Elevate, Abrdn Wrap, Quilter, Aviva and Aegon are the main ones I use.

[@markoutram001]

All very interesting stuff but some worked examples comparing the higher costs of adviser led platforms to those benefits would be useful vs the lower cost D2C platforms. Without this it it difficult to see beyond it just being words defending the higher advisor led costs

[@chrisbourne-retirementplanner]

Hi there. To be honest, adviser platforms themselves aren’t more expensive - in many cases they’re less expensive than direct platforms. There will usually be the factor of adviser charges to figure in, but then it comes down to whether you get value in return for those or not. That depends on what the adviser provides.

[@gemmas5962]

Such an insightful video Chris. I had no idea about this pre funding issue and was thinking about opening a SIPP but will now be much more careful which provider I choose. Thank you! 🙏

[@chrisbourne-retirementplanner]

No worries Gemma. All of these things can just add a bit of an edge.

[@chrisc9406]

I have been told recently by a staff member at a platform provider that HMRC are extending payment time for tax rebate on pension contributions from 8 to 11 weeks. The delay lies with HMRC and not the platform provider.

[@chrisbourne-retirementplanner]

But a good platform provider pre-funds the relief without waiting for HMRC to pay them first. That’s the point.

[@chrisc9406]

@@chrisbourne-retirementplanner Thanks for your response Chris. I thoroughly enjoy watching your channel and appreciate all the valuable information you provide. 👍

[@thomasmcdonald5542]

Very interesting as always. I wasn’t aware of any of these nuances.

[@chrisbourne-retirementplanner]

Glad I could provide some new info Thomas!

[@esmeecampbell7396]

It's an interesting one but really I'd need to see hard numbers from a simulated outcome system like the Monte Carlo algorithm. For example while the 11 delay could mean the rest of your money goes in later after whatever you invest in has gone up in price slightly less than half the time based on historical data it would be cheaper meaning around half the time the delay works in your favour or has next to no difference. Based off expectations on standard deviation at what amount can you invest up to before the generally higher fees of these providers start to make themselves no longer worth it? Obviously that is assuming the D2C providers will keep their same fees which they likely won't.

[@nigelhamilton-brown1918]

Thank you for your videos, I have subscribed and I am learning all sorts of new things about pensions, which I will need in 5 years. Regarding tax relief for pension contributions, if you have a salary sacrifice arrangement for your own contributions and your employers contributions, then I don't think you need to worry about claiming back tax relief?, cheers

[@chrisbourne-retirementplanner]

Hi Nigel. Thank you very much! You’re right - you won’t have to because the money is paid into your pension before being taxed.

[@FreaksSpeaks]

Always learn something new. Thanks Chris.

[@chrisbourne-retirementplanner]

You’re welcome! Thanks for watching 👍🏼

[@craigcleveland3431]

Chris. I have two pensions, one with Zurich and one with Reassure. Both tell me I have to crystallise my whole pension to withdraw anything. Is this common? Is there a way to find another provider to transfer to who will give me access to all the great things like fad and ufpls that you explain so eloquently in your vids? Thanks

[@chrisbourne-retirementplanner]

Hi Craig. It sounds like they're older plans, and they probably don't incorporate the flexibilities of modern contracts. It's not uncommon at all, but before transferring (which is probably possible), you must first check whether there are any valuable guarantees attached to your plans that would be lost upon transfer. These could be things like guaranteed annuity rates.

[@ret185]

Hi Chris. Great video, in future videos could you consider explaining your topic using dummy use cases? Maybe it's just me but applying the togic to 2 or 3 dummy people who range in age, savings etc would help crystallise your excellent content.

[@chrisbourne-retirementplanner]

Hi Ralph. Thanks for your comment, yes I’ll try to work in examples where possible. I sometimes worry that lots of examples can make the content a bit stodgy!

[@Peasenas]

Don’t the pre funded suppliers only allow you to invest in funds rather than stocks and shares of your own choosing?

[@chrisbourne-retirementplanner]

Not necessarily. A number of pre-funding platforms would allow direct stock purchases, but the charges would have to be compared to see if this is attractive.

[@emilebichelberger7590]

It’s pound cost averaging alright, I’m in your corner there Chris. I didn’t know about investment pre funding before this. Thanks for the tips

[@chrisbourne-retirementplanner]

You’re welcome. I just aim to provide new information that may not have been considered.

[@adamnoy9350]

Hi Chris! Are investment prefunding and targeted charging exclusive to pensions? Or does it need to be considered when looking at platform charges for ISA’s, GIA’s and investment bonds i.e. Single premium fixed bonds?

[@chrisbourne-retirementplanner]

Hi Adam. Targeting charging is more pension specific, but investment prefunding can apply to many things… Good platforms will prefund switches between investment funds for example, they’ll prefund contributions that haven’t cleared yet… there will be many days saved over a long period of investment that can add up significantly.

[@uncountableuk]

I'm with ii and I pay the monthly fees from my current account so no investments have to be sold to pay fees. My big question is do these other platforms have fixed monthly fees? That's the big draw to ii for me. I really don't want a % of portfolio.

[@chrisbourne-retirementplanner]

I’d say all other platforms work on a % basis, but some will cap the fee off at a certain level and you can take charges from wrapper cash to avoid investments being sold. Interactive Investor works well for people in accumulation I think. It’s when they move into decumulation that II falls short. As a platform, they aren’t well resourced enough to offer the types of features and flexibilities I demand for my clients in order to enhance their tax efficiency. A failure to pre-fund tax relief is only one of their shortcomings.

[@uncountableuk]

@@chrisbourne-retirementplanner very interesting observations. I've been in drawdown for three years and next year turn 55 so can start to use the sipp portion. I'll have to look more closely at these other options.

[@daveharruk]

@@chrisbourne-retirementplanner What specific features and flexibility does II not, in your opinion, offer? They support TFLS and UFPLS, they allow people to live abroad for only a nominal charge, they do not charge for being in drawdown or for moving away from them. These are the only things that would make any difference to tax efficiency, surely? How do you know they are "not well resourced enough"? Also, saying that they don't pre-fund tax relief is misleading because they do support salary sacrifice, which offers the same benefits - so why not instead complain about employers who will not pay direct into them or pension schemes which won't support partial transfers out?

[@PrettyPennyClub]

Really interesting, Chris, Pre-funding time-scale was new to me. Continuing to produce really useful content. Nice work.

[@chrisbourne-retirementplanner]

Many thanks David. Doing my best to put info out there for people! 💪🏼

[@sonny8085]

Soooo, what platform DOES do pre-funding? 🤔

[@chrisbourne-retirementplanner]

Hi Sonny. Quilter, Abrdn Elevate, Abrdn Wrap, Aviva and Aegon to name a few.

[@sonny8085]

@@chrisbourne-retirementplanner Thanks Chris. I am curious though, as I believe you have stated that you use Vanguard yourself. Can I conclude that you think their low fees and longevity in the game may override the potential benefits from a more expensive provider who offer pre-funding? Cheers

[@chrisbourne-retirementplanner]

I use Vanguard’s funds, but their platform is direct only.

[@simonfisher4154]

I hope you’re well? Another excellent video, Thanks for the information.

[@chrisbourne-retirementplanner]

Hello Simon! Good to see you’re still watching my vids 😊 I’m very well thanks and hope you are too.

[@rogerandout808]

I'd never seen about the small pot before and thought about that - if you're a couple you could spin up quite a few pots there! I've never really worried about the 11 week gap before - I'm making regular contributions and pound cost averaging ( 👍 ) then on month 3 I'd be getting the relief equal to the 4th months contribution when that's made, but I get the point you're making and it's something to consider especially for lump sum investments.

[@chrisbourne-retirementplanner]

Glad it has highlighted something useful Roger. Yes the delayed investment on tax relief will create a drag on performance long term, especially if you’re having to wait 6-11 weeks to receive the additional money on every contribution. The benefits of having the full gross contribution invested from day 1 will add up and compound over time.

[@rogerandout808]

@@chrisbourne-retirementplanner Will definitely bear the pre-funding in mind when I next pick.a provider! This did get me thinking, Is there a video to be made on 3 lesser known pension, savings wrapper and tax rules? For example, my partner is a stay at home mum ... I didn't realise until recently you can still put £2880 into a pension for them and get tax relief up to 3600.

[@iainhunneybell]

Ooo, the Small Lump Sum rules are a new trick and VERY worthwhile know. Thank you this little gem

[@chrisbourne-retirementplanner]

No worries Iain thanks for watching.

[@samp222]

So which investment platform do you recommend please?

[@chrisbourne-retirementplanner]

There isn’t a single recommendation for all circumstances Sam - I use many investment platforms as they each meet different needs.

[@SimonEllwood]

This video was more for people with more money than me! My GIA has always had zero pounds in it!

[@chrisbourne-retirementplanner]

Hopefully that changes Simon! Thanks for watching.

[@SimonEllwood]

@@chrisbourne-retirementplanner I am way better off than the majority of retired people, no complaints.

[@fredatlas4396]

Excuse my ignorance, but what does GIA stand for

[@SimonEllwood]

@@fredatlas4396 General Investment Account. Like a stocks and shares ISA but not tax sheltered.

[@msarros1]

What's your thoughts on vanguard platform does it offer pre- investment funding? Is it possible to do a video on whats best value for money platform for junior isas and sipps? Thank you so much for your videos and value you bring to your audience!!!

[@chrisbourne-retirementplanner]

You’re very welcome Marios. Always good to hear the content is helping. Vanguard don’t prefund I’m afraid. Platforms that do prefund are the likes of Aviva, Aegon, Quilter, Abrdn Elevate, Abrdn Wrap. Although many of these may insist you deal through an adviser. For JISAs, it can depend on the level of investment you’re likely to make, but Vanguard will offer good value, or AJ Bell if you want a wider selection of funds.

[@minimad8793]

Hiya Chris. I can see where your coming from with the prefunding. It would be interesting to find out the costs of fees for a prefunded provider vs the cheaper options just to see how they compare over a 20 year period. It could be your paying more in fees than gains on your investments. worth a vid?

[@chrisbourne-retirementplanner]

Hi there. The fees on platforms like Aviva, Opd Mutual, Aegon and others (all of which pre-fund), are actually lower than many of the direct platforms.

[@holygl]

Thank you Chris, this video is invaluable!

[@chrisbourne-retirementplanner]

You’re welcome I’m glad it’s useful!

[@MrPhilHayward]

the small pots thing is a brilliant suggestion! Which platforms do it?

[@chrisbourne-retirementplanner]

Hi Phil. Many thanks! I’m glad you found the info useful. The platform that allows this is Quilter.

[@spuggysoftware]

Really enjoying the videos Chris! The hidden costs are certainly something I didn't know about. What I DID know about was the not so hidden costs of the advisor led platforms. With Quilter I was quoted some hilarious one off setup fee and a 1% on top each year. Do you think the hidden costs you mention would exceed these kind of fees over the lifetime of a pension?

[@chrisbourne-retirementplanner]

Was that from the adviser or from the platform itself? No adviser platform I use charges any upfront fees like that. I include Quilter in that as well because I have used them in the past. That makes me think it was the adviser, or perhaps it was a discretionary investment service with Quilter?

[@spuggysoftware]

it was the advisor and they gave me a discount on this! I suspect this must be common and legal practice? The advisor will get 1% a year on the investments tho?

[@davidmcnay]

Hey Chris, I don’t think you’ve covered it but could you do a video on withdrawing fund from drawdown and portfolio rebalancing ie what’s best taking assets at a fixed % such as 60/40 or using each withdrawal as a small rebalance such as taking more from stock if your portfolio is say 62/38.

[@chrisbourne-retirementplanner]

Hi David. Thanks for your comment and suggestion. I will certainly see if this something I can cover in a future video. I think it will depend on whether your portfolio auto-rebalances or not. Certain funds will continue re-adjust the exposure to equities and bonds to keep them within their fixed allocation targets. If you are trying to achieve this from separate funds in your portfolio, I think it would be complicated and messy to do it on a monthly basis. It could potentially be done annually if you chose where the withdrawals needed to come from in order to return to 60/40, and allocated those funds to cash for the year’s withdrawals. My instinct would be though that if you want 60/40, just use a portfolio that auto-rebalances to that at regular intervals.

[@lawrencer25]

Another very interesting video . I have many pensions. When I spoke to them , they told me , up to 11 weeks . Normally about 5 weeks . Iam happy with that . You never mention which companies pay , tax relief straight away ??? Keep the good work up 👍👍👍👍

[@chrisbourne-retirementplanner]

Hi Lawrence. Thank you. There are a number… both Abrdn platforms (Elevate and Wrap), Quilter, Aviva and Aegon to name a few.

[@andrewmatthews2138]

Are all of these via an advisor only? I currently have an AJ Bell SIPP and I would be interested in moving to a pre fund pension but the value is not really worth an advisors time as my main pensions are work based

[@alericonda]

Could you provide examples of platforms that offer these benefits mentioned in the video?

[@chrisbourne-retirementplanner]

Hi Alessandro. Yes, there are many, such as the Aviva platform, Abrdn Elevate, Abrdn Wrap, Aegon, Quilter and Transact, amongst others.

[@Ali-zz6yz]

Unfortunately free-trade doesn't prefund still takes 6-11 weeks depending on what time of the month you invest.

[@chrisbourne-retirementplanner]

Yes exactly. There aren’t really any D2C platforms that prefund as far as I’m aware.

[@mattlm64]

Might HMRC crack down on created small lump sum pots with anti-avoidance measures?

[@chrisbourne-retirementplanner]

It’s a good question and it is always possible, but I don’t think they will. The small lump sum exemption is a rule created under legislation and probably doesn’t cost enough in lost tax revenue for HMRC to worry about.

[@jamesstilwell26]

Good video, though you can bet your bottom pound I will continue to say dollar cost averaging to my clients.

[@chrisbourne-retirementplanner]

😅👍🏼

[@actuallythedog263]

The small pots trick is a neat one I really should write all this down but chances of pension rules being the same in 20 years when I can use them are slim to none… that is assuming a labour government hasn’t swept in and stolen our SIPPs to fund whatever “crisis” there is at the time

[@fredatlas4396]

Investing not politics. And if you hadn't noticed the UK stock market and economy hasn't gone anywhere since 2010 and tories running our country

[@actuallythedog263]

@@fredatlas4396 irrelevant to my comment look back at what your man Gordon brown did to pensions the last time the virtue signallers were in power

[@chrisbourne-retirementplanner]

Haha yes the chances of the system being the same in 20 years are slim to none I’d say! The inevitable changes should at least keep me in a job though.

[@slayerrocks2]

@@actuallythedog263 Brown offset some of this with other tax cuts. Pension funds were running surpluses, and businesses were taking contributions holidays. Final salary payments were unaffected, by cutting ACT. In fact, the first chancellor to cut ACT was true blue Norman Lamont.

[@Bluearmy76]

@@fredatlas4396 if you think the stock market hasnt gone anywhere since the tories came to power, whatever you do dont look at 97 to 2010. Avoid at all costs 👍🏻

[@everythingtechnew7400]

I love Free Trade for day trading it does exactly what it says on the tin. As For my pension I’d always get expert advice.

[@chrisbourne-retirementplanner]

Thanks for your comment. Yes that’s a sensible approach, certainly when it gets down to the business end of pension planning - starting and accumulating is quite straightforward.

[@MartinHopkinson]

Very interesting Chris. I’d noticed the pre-funding (lack of) but thought nothing of it. My main investments are with Abrdn (they pre-fund) but I’ve started two ‘small pots’ with Fidelity and Vanguard (they don’t pre-fund.) I’m not sure, though, why they should if they haven’t received it from HMRC. (On monthly contributions, I’m waiting about 8 weeks.) But the thing is, Vanguard and Fidelity are lower cost than Abrdn. I haven’t done the maths but isn’t there a trade off here? (Oh, and ‘pound cost averaging‘ all the way!)

[@chrisbourne-retirementplanner]

There is a trade off Martin, which needs to be worked out. Which Abrdn platform are you with though? There are platforms who prefund that would be at least as low cost as Fidelity, some would compete with Vanguard on price but offer much more.

[@derricksmyth]

The Aberdeen pensions also seem to have drawdown charges applied

[@MartinHopkinson]

@@derricksmyth I’m in Flexi Access Drawdown but haven’t made any withdrawals yet so I haven’t experienced that. However, I think drawdown charges only apply to off platform assets, which wouldn’t affect me. That said, I need to check again so thanks for mentioning it.

[@MartinHopkinson]

@@chrisbourne-retirementplanner Abrdn Wrap Chris.

[@plokoon2748]

Hello and thanks for the content. It helps. Would you be able to do a piece on DB schemes PCLS and possibly recycle that lump sum into a Sipp? My salary is 32k, PCLS will be £115k. Cheers KUTGW.

[@chrisbourne-retirementplanner]

Hi there. Unfortunately, paying that lump sum into a sipp would fall foul of the recycling rule, would be treated as an unauthorised payment, and taxed accordingly. The rules are in place to prevent people benefiting from further tax relief on a tax free payment that has already previously qualified for tax relief.

[@plokoon2748]

@@chrisbourne-retirementplanner Thanks for the reply. I also have an inheritance coming to me in October £80k approx would I be able to put all that into a Sipp or am I constrained by the amount I earn approx 32K? Cheers.

[@chrisbourne-retirementplanner]

Yes your maximum personal contribution would be limited £32k gross (£25.6k net), including any pension contributions you may have already made in the tax year.

[@plokoon2748]

@@chrisbourne-retirementplanner Cheers. Top man.

[@khiburgess5848]

I've used the Elevate for the pre-funding but to my knowledge there isn't a platform form that offers the 3 features in this video damn I hope I am wrong?

[@chrisbourne-retirementplanner]

Old Mutual offers all 3. The platform you choose comes down to circumstances though. Sometimes pure cost is what you should focus on. Sometimes features are more important.

[@khiburgess5848]

I'm with you Chris I'm a Financial Planner also clearly suffering from not looking outside ones comfort zone etc. You would think someone like Transact would include this also. If Quilter get bought by Natwest I wonder how long such features will last???

[@chrisbourne-retirementplanner]

I was just coming back to correct my comment actually and say that OM is now Quilter of course… I can’t get out of the habit of saying Old Mutual still! All platforms seem to offer something, but I find it’s always good to revisit the platform choice every so often because things never stand still.

[@khiburgess5848]

@@chrisbourne-retirementplannerThose are indeed wise words. Actually will make platform due diligence much easier.

[@lawrencer25]

@@chrisbourne-retirementplanner old mutal still going ?

[@gordonjames8233]

I benefitted from this recently by putting some money into my SIPP in April this financial year. Vanguard put the tax relief amount some five/ six weeks later in early June as the markets had dropped. You win some, you lose some. But it looks like a month to six weeks before the HMRC cough up. Cannot knock the 20% uplift from the state though.

[@chrisf1600]

Well to be fair, the 20% was your money originally :)

[@chrisbourne-retirementplanner]

Yes that can be the case Gordon. I mentioned part way through of course that you can sometimes find markets move down and therefore benefit from delayed tax relief investment, but over a long period of time we know that markets move up more often than they move down.

[@pelocitdarney5718]

I agree with Chris F. It's not uplift from the state. It's the state allowing you to keep some of your own hard-earned money, instead of extracting it from you whether you like it or not.

[@fredatlas4396]

Actually 25% you get back and higher rate tax payers a lot lot more

[@gordonjames8233]

Fair enough. But if death and taxes are inevitable. Then at least I'm avoiding one of them (for the time being)

[@2ez4m]

Thumbs up for PCA

[@chrisbourne-retirementplanner]

🙌🏼

[@rwsteward10]

Brilliant video!

[@chrisbourne-retirementplanner]

Thank you Ryan!

[@cherryhouse8364]

Please add a video regarding life time allowance once reached 1M pounds where to move the funds to avoid Annual Management charge?

[@chrisbourne-retirementplanner]

I will do another LTA video soon. Tbh it’s quite often still just best to contribute to the pension and not worry about the LTA charge, especially if you are a higher or additional taxpayer.

[@beaverundercover3479]

Very disappointed with no names being mentioned.

[@chrisbourne-retirementplanner]

There are quite a number of adviser-led platforms that pre-fund tax relief though, including both Abrdn platforms, Aegon, Aviva, Quilter and others.

[@glennrobinson1221]

It might just be me but I think the maths is wrong. It is not as bad as waiting two years for tax relief when you add up all the different week period. The time is rolling - it is more like you decided to start to invest 11 weeks later than you actually did.

[@chrisbourne-retirementplanner]

That would only be the case if you invested just once. If you continually invest and continually find that part of your investment is delayed, then that money is consistently out of the market.

[@slayerrocks2]

Most people will be adding small, regular sums. The most you will likely wait for will be 2 months tax relief.

[@chrisbourne-retirementplanner]

It doesn’t really matter whether it’s small regular contributions or large lump sums… If you’re having to wait a couple of months for 20% of every contribution to be added, versus having that money invested immediately and compounded, it makes a huge difference over a sustained period of years.

[@slayerrocks2]

@@chrisbourne-retirementplanner it does make a difference though. After say 2 months you have your first payment. Then you are only 2 months payments behind. So, putting 200 per month away you will only ever be 100 behind. (6 weeks, in my case)

[@chrisbourne-retirementplanner]

No, work it out… you’re behind two months (sometimes three) on EVERY payment you ever make. You’re not catching anything up, because you’re late getting the next payment of tax relief, and the next one, and so on. Then flip it round and remember that if prefunded, EVERY payment would receive an extra 2-3 months in the market. Compound that up over many years and it makes a significant difference.

[@jasonburford2013]

Chris. I’m thinking of becoming an IFA. Can I ask which FCA activities you are approved to give please? I want to be like you lol.

[@chrisbourne-retirementplanner]

Hi Jason. Well for the purposes of my SPS my activities are advising on packaged products and advising on friendly society tax exempt policies. Those are the regulated activities of course, but the role of a financial planner is much wider than that. Most of my time is spent on cash flow modelling and tax planning strategies.

[@jasonburford2013]

@@chrisbourne-retirementplanner Thanks for answering Chris. Can I also ask how you charge your clients? Is it an hourly rate or something like that?

[@chrisbourne-retirementplanner]

I use a combination of flat fee and percentage charging Jason. I still believe that an element of % charging is essential to account for an adviser’s own risk exposure. I.e. the adviser has more liability investing £1m for somebody than investing £100k for somebody, so charging the same flat fee would not be appropriate.

[@ImpossibleAnswer]

Hi Chris - just retired but not done anything about my pension pot - can we talk?

[@chrisbourne-retirementplanner]

Hi John. Thanks for your message. My contact details are in the About section of my KZbin channel page.

[@A_friendwithoutbenefits]

Let's say you contribute into your pension every month, and let's say week 1 was your very first contribution. Assuming a 11-week delay, your first tax relief will come in at week 12. this means future tax reliefs will come at more or less on weeks 12, 16, 20, 24, 28 etc etc. So looking at the numbers above, actually the only real delay is in the very first contribution. After that you'd get the tax relief every month, just at a different time to when you make the contribution, no? Sure, some compounded growth will be missed out from the tax relief delay in the very first contribution, but in the grand scheme of things doesn't sound like a big deal to me.

[@chrisbourne-retirementplanner]

No every tax relief is delayed by up to 11 weeks. You’re only receiving at those intervals because of the frequency of those contributions but it doesn’t remove the fact that they all receive a delay. Effectively, if your tax relief is £8k in a year, over a 30 year investment period that £8k would have had an extra 6 years in the market if prefunded. That can be quite significant.

[@peterferguson7583]

@@chrisbourne-retirementplanner List the total amount of contributions and tax relief without and with pre-funding side by side. Assuming a monthly £1000 investment, the totals for months 1 to 5 are: no pre-funding - £1,000, £2,000, £3250, £4500, and £5,750; with pre-funding - £1,250, £2,500, £3750, £5,000 and £6,250. The no pre-funding totals could be made the same as the with pre-funding totals by making an additional contribution of £250 in month 1 and a further £250 in month 2. The cost of no pre funding over say 10 years is therefore the same as the returns on £250 over 10 years plus the returns on another £250 over 9 years and 11 months. Rounding it up, the cost is returns on £500 over 10 years. Assuming a 10% return, the cost would be £796.

[@nickseccombe1357]

Wtf can't believe i never heard of this

[@chrisbourne-retirementplanner]

It goes under the radar Nick. Direct platforms don’t want to draw attention to it.

[@phil1edinburgh]

So surely your complaint about the 11 weeks delay by HMRC should be against HMRC. Pre funding costs money - so Did you cost this?

[@chrisbourne-retirementplanner]

Anybody can choose to wait up to 11 weeks if they want. I’d choose not to though. Makes a little bit more sense don’t you think?

[@daveharruk]

You keep saying "11 weeks" as if that is somehow set in stone, but in my experience it is normally way less than that - on average I'd say about half the time. Also, I don't know about any other direct platform, but with II, there is no wait for funds to clear - they are available to use right away. If you sell something the funds from that are available the next working day. They also support salary sacrifice, so if you can persuade your employer to do this, this gives the same benefit as pre-funding of tax relief. The other advantages that you talk about would only be useful for a small number of people yet nevertheless they can largely be achieved in other ways - for example creating a number of small pots could be achieved simply by opening multiple accounts.

[@jacmac9996]

Thank you Chris for all your brilliant video information. With the 3 smaller pots…is that £10k initial investment and the compounding is also tax free…or do you split it when you do Drawdown? I’ve invested last yrs pension but nothing this year yet and wondering if best to start separate platform! Cheers from 🏴󠁧󠁢󠁳󠁣󠁴󠁿

[@chrisbourne-retirementplanner]

Hi there! You can actually split the pots at the point of accessing - this is important because the pots cannot exceed £10k. The platform that allows this by the way is Quilters.

[@philipgreenwood3251]

Understood little to zero. I would like easier to understand bullet points explainer statements. Crystallised pre fund small pot blah, erm what? I'm sure there's some key info herein, but the signal to noise ratio delivered fog

[@chrisbourne-retirementplanner]

Thanks for taking the time to comment.

[@philipgreenwood3251]

@@chrisbourne-retirementplanner I've seen other videos you've made, and hat's off, they're very good (investment). But this one was a bit hard to consume.

[@bengunns]

You might be related to Colour Sergeant Bourne the hero from Zulu

[@chrisbourne-retirementplanner]

Haha maybe you’re right! I did recently find out that one of my ancestors was the wife of a founding father of the US… that’s the closest thing to fame I’m aware of in my family tree 😄

[@johnnyworzel3741]

I’m happy to get tax relief at all. I’ll accept a short delay.

[@chrisbourne-retirementplanner]

At least you know Johnny. Everybody has free choice as to whether the want to benefit from options or not.

[@toddliveringhouse5808]

What a dumb take. How about the financial advisors pay the no interest loan out of the fees they charge their clients? Makes as much sense. Why someone thinks a platform provider should bear the cost of inefficient government is beyond me.

[@chrisbourne-retirementplanner]

But then that assumes the financial adviser adds no additional value. That mainly comes down to education, or lack of it. I don’t blame you for that though. Much of the adviser community came out of the old commission based world, and still hasn’t learned to articulate its purpose and value very well.

[@toddliveringhouse5808]

@@chrisbourne-retirementplanner My reply that advisors should bear the cost was facetious. Really the individual has to foot the bill or try to get government to be more efficient. I don’t have that particular issue since we really don’t have that kind of setup in the United States. My point really was the platform provider should not bear the cost because it is not a problem they introduced. You might as well blame a random person walking down the street.

[@chrisbourne-retirementplanner]

The main point is though that some platforms will invest the full gross pension contribution from day one, and others won’t. Most people are unaware of this and are losing out as a result. If the relationship is purely between the customer and the platform, who else can be blamed? Yes it would be nice if the revenue were quicker to pay tax relief, but they’re not. The benefit of using a platform that pre-funds is therefore very clear.

[@howardsmith8723]

Thanks for the video. I didn't know that there were advisor platforms that added the tax relief earlier. I've been with my current platform for many years but recently after talking to a chartered financial planner the penny has dropped that the advisor's lower cost platform means that with the advisor charges it's not much different to my current platform charges. And with that I get the advice and access to advisor products like dimensional funds, so added value. Reinforces everything you said.

[@chrisbourne-retirementplanner]

Thanks Howard. It’s great to hear you’re seeing the value of advice 👍🏼