SIPPs

[Myfordman]

A few years back I opened a SIPP for my son as a tax efficient saving method during tertiary education. He has no graduated but still looking for work. Once working he can take this over.

The SIPP provider was making modest charges amounting to £75 per year based as a % of fund value. Now they have announced an additional flat fee of £120 pa which is taking the pi88 somewhat on a smallish pot as it amounts to over 1 months contribution. I realise moving to another provider will likely attract an exit fee and I'm enquiring about that.

Does anyone have suggestions of a low cost SIPP provider ideally with modest % charges and not fixed fees more appropriate to a small pot. Being able to hold a range of funds rather than tied to a small selection would be a bonus too.
TIA

 

[artie]

Put you <£120 a month into physical gold.

 

[Myfordman]

Put you <£120 a month into physical gold.

That does not get any tax relief as it is not a SIPP

 

[artie]

That does not get any tax relief as it is not a SIPP

True but isn't return more important?

 

[Myfordman]

I take your point but I already have the sipp set up and the charges will soon rise from £75 to £195 pa if I do nothing, even if I stop contributing.
therefore I need to move it out from the current provider into a cheaper one.
Your suggestion however good in investment terms it maybe sadly is of no help in this instance.

 

[PerryGunn]

I don't know how much you have in the SIPP but my wife has an additional Hargreaves Lansdown SIPP and they charge 0.45%

 

[dickm]

I'm lucky with a final salary pension (Those were the days) but have some ISA investments with Hargreaves Lansdown. According to Which, they are not the cheapest, but do seem pretty reliable.

 

[Myfordman]

Thanks.
Comparing my existing provider to HL, the charges break even at around £80k and there is nothing like that in my pot - so looking a possibility

 

[Myfordman]

Thanks Dick,
HL are expensive for ISAs. Assuming you don't need investment advice, maybe consider iDealing or iWeb. I use both now that the Share Centre have been taken over by Interactive investor and charges have shot up.

 

[Myfordman]

Now that basic rate taxpayers* can earn £1k of investment interest each year, the case for ISAs is much weaker.

*equivalent allowance for 40% taxpayers is £500 pa

 

[Duncan A]

If you do a search on "SIPP charges", there are plenty of websites comparing different companies and their charges. They usually make specific reference to pension fund size so that it becomes clearer which SIPP's are best for pots of various sizes - in your case you are looking for low charges on a small pot.
Best SIPP: Build a low cost DIY pension - MoneySavingExpert is often a good place to start.
Fidelity are OK - not the cheapest but cheaper than HL and with a good website.
Marcus are cheap but I think only have their own funds.
Duncan

 

[Blackswanwood]

Money Saving Expert have a comparison of low cost SIPP providers.

https://www.moneysavingexpert.com/savings/cheap-sipps/

 

[Lons]

Check your fine print as you might possibly have a right to exit without penalty because they've changed their charging structure, you might be lucky, never know.

 

[C64]

- What, broadly, does your son’s SIPP invest in? The sipp providers charge different fees for funds vs shares/ETFs.
- How often do you trade? II, for instance, gives one trading credit per month.
- How important is the ability to invest in a wide selection of stocks and in other countries? Some platforms like Fidelity offers IMO a very narrow selection of shares and funds but might be more than adequate for your needs.

I have HL and II because they both allow me to invest in esoteric US stocks and II holds cash in US dollars and Euros rather than automatically converting to Sterling which saves on back-and-forth FX conversion fees. These are the main criteria for me with the higher running fees being the cost of doing business.

Lastly, you can’t shield your capital in ISAs from inheritance tax whereas pensions are outside your estate when adding up the assets. It may or may not matter depending on a person’s circumstances ie. if total assets above the nil rate band threshold. Rental property is the worst for taxes being charged at the income, capital gains and inheritance levels.

 

[Flynnwood]

FWIW I would avoid any levered ETF.
(137) How does a levered ETF work? - YouTube

 

[C64]

FWIW I would avoid any levered ETF.
(137) How does a levered ETF work? - YouTube

The only winners here are the ETF providers.

 

[C64]

Now that you have pique my interest, I did a quick scan of the current annual base charges of typical SIPP providers:

Vanguard 0.15% capped at £375 (equivalent to £250,000 value)

II service charge £120 + SIPP charge £119.88 = £239.88 fixed cost

HL 0.45% capped at £200 (equivalent to £44,444 value)

AJ Bell Youinvest 0.25% capped at £120 (equivalent to £48,000 value)

Barclays SIPP charge £150 + 0.1% capped at £1,500 (equivalent to £1,500,000 value)

iWeb charge £90 for £0-50,000 value, £180 for >£50,000 value

Bank of Scotland charge £90 for £0-50,000 value, £180 for >£50,000 value

Halifax charge £90 for £0-50,000 value, £180 for >£50,000 value

Note some have transfer-in fees and each have different dealing charges which I haven’t listed above. Also, FSCS scheme covers up to £85,000 (per institution) so folks with large pensions might want to spread their over a few providers to get sufficient compensation coverage.

 

[bryan267]

Costs are a part of the equation when selecting a provider, so too is service and stability but also performance of and cost of the underlying investments. Some providers will have an entry charge on many external funds so that they appear a cheap provider on first glance but if your making fund changes they become much more expensive. Some of the best providers are not open to public investment, at least not initially but can allow it after set up.

of the providers i know well and are available to public purchase, AJ Bell are pretty good and are pretty cheap. You can get stuck if you ever need advisers help in their youinvest contract, but it is slightly cheaper than there main proposal. AJ Bell are a bit less likely, in my opinion, to sell out to the likes of standard life and are making a profit. AJ Bell do have very good access to a wide range of investment funds.

Saving a few hundred quid in charges is a pointless exorcise if your in cr4p funds and buying funds because their cheap is a false economy. I have several funds that cost more than 2% pa and I am very glad to have them as cheaper alternatives have significantly lower performance. But funds isnt something that can be discussed properly in a forum so I will leave that there.

 

[Myfordman]

Just popped back in to find lots of replies. Thank you.
@Lons the providers have emailed to say no exit charges. bonus!
@C64 Fund is quite small at the moment ~£25k all invested in one of the providers own aggressive growth funds. fairly high risk but my son is in early 30s so reckon that is ok
At some stage I assume he might want to take over management but currently it is one trade per month to invest the contribution and the tax relief.
When I move it I will not be doing many more trades but will possibly move in to some of the Fundsmith offerings that have been quietly doing well for my own portfolio.
Thanks very much indeed for your research into charges. I'll capture that lot into a graph as an exercise. I have ISAs with iweb currently and trading is easy and smooth but customer service contact leaves something to be desired as you have to wait online for a pop-up indicating someone is free. you can phone but when I'm looking at my wifes account my voice is just too deep to be credible on the phone lol
@bryan267 yes i agree charges are only one part of the equation. I like to choose my funds so not needing a strong advice team but I do like to be able to raise queries by email as I keep written replies and not may providers embrace email. iDealing ISAs do but not sure if they do SIPPs. I'll email them to ask!
I've lots more to go on thanks to all your replies. much obliged.

 

[Glitch]

I use AJ Bell for a small SIPP and for a couple ofISAs.

Easy to use website and a good range of funds. Fees seem reasonable. SIPP drawn down is straightforward and efficient.

Wife has a Standard Life SIPP which seems a lot more complicated. We’ve stuck with the IFA who transferred her DB pension into it. Keep telling ourselves to sack the IFA as he does nothing except the occasional drawdown. The funds have done OK.

I’m a fan of the Vanguard Lifestrategy products. You can buy them direct from Vanguard. Just choose the percentage of equities you want. Makes investment simple in what can be confusing and complex.