SIPPs

[Myfordman]

@C64 a few point to add to your charges research that I've come across. iWeb, Halifax and Bank of Scotland are all part of the same group hence their charges being the same. they act as and intermediary for AJ Bell. transaction charges £5
AJBell youinvest charges are as you found for shares but if you hold funds inside the SIPP, the £120 cap no longer applies instead first £250k, 0.25%, from £250k to £1m 0.1% and £1m to £2m 0.05%, zero thereafter They also have different transaction charges. Shares £9.95, funds £1.50 makes comparison even more complex.
hope this helps anyone following this thread thinking of moving.

 

[Richard_C]

Some general ramblings - I do like SIPPs and wish I'd started earlier.

I am happy with HL for service, range of funds and very good customer web interface but I know they are not the cheapest. They might have been the first to offer discounted investment fees in ISAs (or was it PEPs?) all those years ago and I've not been near an adviser since.

Someone has mentioned inheritance tax advantages with SIPPs - yes, but you need to fill in a 'wish' form which is easy, and it doesn't apply after age 75. Your withdrawal options get a bit more limited after that as well - not many years ago you had to buy an annuity before you reached 75 but no longer. Hope I'm either very fit at 74.9 or plug-pulling ill: dying at 75.1 is an unattractive prospect from the tax (or any other) perspective. You get more aware of these things whan you are almost 70 .

With a small pot and modest contributions, if there is a de minimis floor charge for buying funds each month it might be worth making contributions quarterly or half yearly instead of monthly.

Over the year I have been reasonably happy with tracker funds - the big providers like L&G (there are others) who offer trackers in all the major markets at a very low cost and low platform charges. They do far worse that many managed funds, but far better than many. In fact by definition if their charges are lower they will give a slightly better total return than the average all equity funds in any particular market over a long enough period. To beat them you have to make the right decisions more than 50% of the time. Woodford looked very right...until...etc. Trackers aren't a bad idea if you are looking after things for someone else: you will never be wrong.

Exit fees for SIPP transfers are unusual but check if the transfer is in specie (i.e. the shares or funds simply get moved to another platform) or if it's sell and repurchase. The latter can lead to transaction charges. HL can accept in specie transfers from most other providers, no idea if the others can - it probably depends on the range of funds the recieving platform offers.

 

[powertools]

Why don't you just make him a director of that dodgy LTD company you are running and take out cash in dividends.

 

[C64]

@Myfordman I did the salesman trick of giving you the headline numbers which were based on shares as opposed to funds . As your post alluded to, the SIPP pricing comparison gets quite convoluted especially if the pension is in drawdown but that won’t your son’s problem for quite a while!

I used AJ Bell for regular sharedealing in the past and their online platform was fine and their telephone customer service were good too. Nothing to complain about. iWeb were passably ok but their customer service was a bit hit and miss for me. I doubt I would go back to them unless there was a great introductory offer in place (even then maybe). HL platform is probably the standard bearer in the UK and the only moan I had about their service was when a stock I bought online about 3 years ago was taken off online trading and had to be telephone traded at a much higher commission.

@Richard_C you’re right about the looming tax to beneficiaries when inheriting pensions from someone over 75 which doesn’t apply before 75. The tax issue gets complicated quickly depending on the person’s circumstances which changes over time, too. Pensions are marketed heavily as a tax free way of saving but the tax lying in wait is not so loudly shouted when it’s time to get the money out.