Forthplus Pension

An independent review by our team of experts.

Review summary

Forthplus Pension

Forthplus Pensions is an Edinburgh based, FCA regulated SIPP provider, with products and systems developed exclusively for fully regulated independent financial advisers.

Forthplus Pensions Limited is authorised and regulated to operate, establish and wind up pension schemes.

The Forthplus SIPP was established by Trust Deed on 2nd September 2015.  Chris Holyoak has been managing director since 2014

The Trustee, as with all ‘bare trustees,’ has the sole purpose of holding the assets of the pension scheme on behalf of the beneficiaries, and acts (with regard to investments) on the instructions of the member or the member’s appointed professional adviser.

Overview
  • Improve the client and adviser experience through better technology, service and products
  • To bring simplicity to pensions - to help make systems work for people rather than make people work for the system
  • To offer a product that can help investors move into retirement with more confidence

We believe that Forthplus deliver.

Forthplus SIPP is a secure, quality product that’s supported by an online system with a range of tools including calculators, guides and printable illustrations that aid advisers and clients in the advice and decision making process.

Forthplus Pensions require a lump sum of £10,000 with regular instalments, or £30,000 if it’s a one off transfer.  Alternative pensions arrangements and wrappers (where appropriate) can be transferred into the SIPP. 

The annual allowance for a pension contribution is currently £40,000, in order to receive the maximum tax allowance. 

Pension drawdown is by two methods: capped drawdown and flexi access pension drawdown.  The pension can be transferred to a nominee when you die.

Forthplus’ SIPP costs £400 to set up, and £400 ongoing - but contributions, transfers and dealing are free with relatively low charges for drawdown by either method.  For example, the annual capped drawdown charge for taking regular income is £150. 

The pros

  • Transparant and easy to understand fee structure
  • The Forthplus SIPP will not accept non-standard (non-vanilla) investments within its structure regardless of investor profile
  • Strong customer service

The cons

  • Only offers a UK solution.
  • Fairly new to the market place, established in 2015.
FAQs
What are the main risks or drawbacks to be aware of with Forthplus's SIPP??

There are a range of risks which you must take into account when considering whether The Forthplus SIPP is appropriate for you.

The following details some subjects, but your professional adviser will be able to go through more specific considerations based on your circumstances.

The purpose of The Forthplus SIPP is to allow its members to build up savings to provide for retirement.

Three key risk factors specific to this product which you should consider when deciding if The Forthplus SIPP is able to provide for you through retirement are:

• Funding the plan

• Investments

• Withdrawals

You should also consider other factors which may be outside of your control, such as the availability of tax relief on contributions, changes in legislation and changes to the pension environment.

When can I access my Forthplus SIPP?

From the age of 55 you will be able to take benefits from your pension.

These can be taken as income, lump sums or by the purchasing of an annuity.

Under the current income and lump sum rules for the SIPP, these can come in the form of a tax free element and a taxed element.

There is not a limit on the amount of pension you can take out, although if you started taking your pension before April 2015 you may be in capped drawdown, which is limited.

You can switch to flexible benefits (limitless) at any point, although this will mean the introduction of an annual allowance on contributions across all pensions.

Taking income payments early on in retirement or taking large amounts will reduce the value of the pension and potentially its ability to provide an income into the later years of retirement.

Additionally, if you start taking income earlier than planned, then this may have an impact on the pension fund’s ability to support you, its longevity and its ongoing growth.

Your pension holdings may be subjected to additional tax levies if the total value of all your UK pension holdings are greater than the Lifetime Allowance – a limit which the government have put in place in respect of the preferential tax advantages for pension savings.

The limits are £1.25 million in the 2014/15 tax year, and this is reducing to £1 million in April 2016.

In certain circumstances individuals may be eligible for, or may have been provided with, protection in respect of these limits for pension savings they have already built up which near or cross the limits.

Sometimes these protections however are conditional, such as a requirement to no longer contribute to the plan, which may affect the original plans regarding your pension savings.

If you decide to use the pension fund to purchase an annuity, which is where you transfer your pension fund in return for a lifetime income, often guaranteed for a period of time to provide for beneficiaries, relative to your choice.

You can choose to take your tax free element and then transfer the remainder to the annuity provider to purchase the annuity, or forfeit the lump sum in favour of a higher income.

There is no guarantee that annuity rates will improve in the future.

If you elect to take an annuity, it may provide you with more or less income than you may be able to get through remaining in the SIPP.

In taking an annuity, you will give up the benefits in the event of death from your pension, such as the ability to pass on the pension as a lump sum to your beneficiaries, in favour of whatever terms are offered by the annuity provider.

It is usual that the provision of more protections, benefits and guarantees will be provided in return for a lower initial income, therefore, an annuity with a fixed income amount for life, and with no benefits for any dependants will have a higher rate of income compared to an annuity which is fixed to inflation rates and provides guarantees for your dependants should you die within 5 years.

You should consider all of these factors.

Is The Forthplus SIPP a stakeholder pension?

No.

The Forthplus SIPP is not a stakeholder pension.

A stakeholder pension is a relatively simple pension solution with a limited range of investments and a range of governmentally prescribed minimum standards including charges, minimum payment levels and terms and conditions.

What happens to my Forthplus SIPP when I die?

With a SIPP you are able to pass on any residual pension value as a lump sum or as pension income to your dependants.

On your application form you will be able to nominate who you wish to receive your pension and the percentage you wish to allocate to that individual. The Trustee will then take this nomination into account when arranging for the dispersal of pension benefits.

Your nominated beneficiaries will be notified that you have pension benefits to be passed on. They will be given the options available to them so that they can confirm how they wish to take on the benefits. The options currently available to them are to take the amount as a lump sum, paid straight to their bank account, or to have the amount paid as an income.

If the Member is under the age of 75 when they die, the whole value of the pension can be passed on tax free, as long as it is paid as either a lump sum, or is paid through Flexi Access Pension Drawdown.

If the Member is over the age of 75 when they die payments to the chosen beneficiary will be subject to income tax at the beneficiary’s marginal rate.

There are no restrictions on the level of withdrawals that can be taken.

What are the fees and charges for Forthplus's SIPP?

Set Up and Administration Setting up your SIPP (1) £400

Contributions (one off or regular) to your SIPP(2) FREE

Transfers into your SIPP(2) FREE

Annual Administration Charge (paid in advance)(3) £400

Ongoing Management Investment Purchase FREE

Investment Sale FREE

Annual Valuation Reports FREE

Annual Pension Illustrations FREE

Additional Valuations or Illustrations(4) £25 each

Calculating and Taking Benefits Income Drawdown (Capped Drawdown):

Annual Income Drawdown Charge (if taking regular income) £150

Annual Income Drawdown Pension One Off Payment Charges(5) £50

Income Drawdown Reviews (other than statutory reviews)(6) £100

Flexi Access Pension Drawdown (including UFPLS):

Flexi Access Pension Drawdown Calculation(7) £75

Start Flexi Access Pension Drawdown(8) £150

Annual Flexi Access Drawdown Charge if not taking income NIL

Annual Flexi Access Drawdown Charge if taking regular income £150

Each one off Flexi Access Drawdown pension payment(5) £50

Other Payments for your Pension

Pension Splitting on Divorce £150

Triviality Pension Payment £150

Transfers to Other UK Pensions Schemes (Cash) NIL

Transfers to Other UK Pension Schemes (In-Specie) NIL

Pension Transfer to QROPS (Cash) NIL

Pension Transfer to QROPS (In-Specie) NIL

Arranging Death Benefits £150

Notes referenced above:

1 This amount is to set up your SIPP, its bank account and to provide you with the relevant information on membership. This amount becomes due on acceptance of your application form by the Trustees, and will be settled on receipt of the first contribution or transfer received into the bank account. If you have transferred ‘in-specie’ without any cash element, we will collect this from your investments.

2 Contributions and Transfers are free. You can contribute any cash amount subject to the minimums, or transfer in a pension as cash or in-specie, without any charge.

3 This amount is for the normal operating of your pension plan, any reporting we need to make, and the administration of the scheme. Within this amount we cover the provision of the online systems, where used, the preparation and provision of annual statements and illustrations. This amount also covers the administration relating to transfers into the scheme, contributions into the scheme and any investments.

4 Additional valuations, as well as illustrations not relating to a pension drawdown calculation, in excess of the annual provisions carry a charge, however, our online systems allow you to gain some sight of the pension and investments, and your investment provider may be able to provide you with direct access to their own valuations. This charge covers the administrative responsibility to contact all relevant parties to collate the information, update our systems, and generate the illustration or valuation.

5 Where you request the Trustees to make a one off payment from your pension, either outside of a regular arrangement for pension to be paid, or where there is no such regular arrangement in place, this additional charge will be levied. This charge covers the administration of the payment as well as the tax reporting and remittance required in respect of this payment. Note: There may be tax implications with taking ad hoc payments. Unless we have an operable tax code, we will use the standard tax code applicable. You may be liable for an adjustment as a result of payments which are not in line with your tax code. You should contact HMRC with details of your income, including the pension, to find out more.

6 Income Drawdown currently needs to be reviewed every 3 years (annually from 75 years old), however, you may be eligible to review your pension income limit each year in the 60 days preceding the annual review date. If you wish to review your pension at this time, it will carry this additional charge. Note: Where you have completed an Income Drawdown Calculation, this will be offset against the charge. This will not be charged for any review statutorily required.

7 This charge covers a valuation of the pension fund, calculating benefits and providing an illustration of the potential benefits available. If a simpler or speculative calculation is required, a reduced charge may apply. If you proceed to act on the calculation within 30 days of its execution the charge can be offset against the Drawdown charge.

8 This charge covers a valuation of the pension fund, calculating benefits and putting part or all of your pension into a ‘crystallised’ state. Where you are eligible for a tax free lump sum, the arrangement of this will also be covered in this charge. Note: This does not include any bank payment charges where applicable.

Customer reviews
Actually transferred my Forthplus SIPP to a QROPS

I was very happy with the Forthplus SIPP, but have just finished transferring it as I've moved abroad.

Used another of the companies on here that you review - IPTS - they did the complicated stuff and said the transfer was right for me.

Really smooth transition, Forthplus didn't hold it up or make it awkward as I half expected them to.

So, I'll say 5 out of 5.

Expert verdict
Expert Assessment of Forthplus Pension

Overall, this is a very competitive product with transparent low annual fees rather than hidden percentage charges.  Set up cost is less than half that of similar products, and drawdown is reasonable as long as you remain above the £20,000 minimum.

Forthplus is a cost effective SIPP that is technically proficient.  It represents a good safe haven for many people who have previously been with other providers.

Read the UK regulator’s advice on pension transfers here.  NEVER deal with a firm that isn’t authorised as a UK pension transfer specialist.

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