Frequently Asked Questions
Why use Cavendish?
The benefit of using Cavendish Online is that we reduce the charges to the lowest available. This is because we do not take any commission and we simply charge a set-up fee to start your pension. We act as the intermediary or advisor, even though we do not offer advice, in order to lower your costs on stakeholder and personal pensions.
Our service is designed for clients who have done their own research and know which pension they would like to invest in. We will happily arrange the pension although we cannot offer any financial advice. Cavendish is strictly an ‘execution-only’ service.
If you’re unsure about the suitability of any particular financial product you may wish to seek independent financial advice from a fee-based IFA.
How can Cavendish save me money?
The only charge applicable on stakeholder and personal pensions is the annual management charge (AMC). This is normally 1 to 1.5% if you were to go to the company direct or via another commission based financial advisor.
Cavendish Online cannot give the commission on a pension back to you as cash. We can only reduce the AMC on your plan from the outset. Insurance companies will not allow us to alter the commission structure of an existing plan, because they are in an agreement with your previous advisor to pay commission to them. Although you can transfer this commission to Cavendish Online we are not able to pay it to you and would instead require you to repension to benefit from our discounts.
The way in which Cavendish can save you money is that we simply give up all our commission from your chosen pension provider and pass this on to you in the form of a lower AMC. The table below shows some examples of the effect of Cavendish Online foregoing any commission.
| Initial investment | Initial commission | Renewal commission | Fund value at retirement* | |
|---|---|---|---|---|
| Cavendish Online | £100 per month gross | Nil | Nil | £94,200 |
| Full commission | £100 per month gross | £877.50 | £2.50 per month from month 27 for the rest of the term | £82,800 |
*Assumed growth of 9%. Retirement 25 years after starting Pension
To see other examples of how you can save money via Cavendish please click here
Can I top-up an existing pension via Cavendish Online?
Yes. With most providers there are two options to do this.
The first is simply to just make the new contribution via Cavendish Online. In this case only that new contribution will be on the reduced AMC and your existing pot will be unaffected (presumably remaining on the normal, higher AMC).
The second is to set up a new plan via Cavendish Online and to simultaneously transfer your existing plan into the new one. This way your whole pension will be under Cavendish Online’s reduced charges. This process is called 'repensioning' and is described more fully here
What’s the difference between stakeholder and personal pensions?
Broadly speaking, the difference between Stakeholder Pensions (SHP) and Personal Pensions (PP) is that SHPs are generally designed to be lower cost but the PPs will tend to offer a greater investment choice.
For both SHP & PP however, costs and choice will be different from one company to another.
You will notice that PP & SHP will have a set number of what are called ‘internal funds’ (core funds). These are a broad range of pre-packaged funds in which clients’ pension monies can be invested. This range typically offers lower, medium and higher risk/ reward strategies. Beyond such internal funds, one may elect to invest into an array of funds which are ‘external’ to that main list; however this tends to attract an additional AMC (which Cavendish cannot reduce). PPs generally have more external funds on offer than SHPs.
How much will it cost?
In exchange for relinquishing all its commission back to the investor, Cavendish simply charges a one-off set-up fee of £35. Similarly, a repension will cost a one-off fee of £70, representing the new plan and the transfer of the old one into the new one.
