Cheapest Sipp: build yourself a low cost DIY pension article

Hello. I plan to transfer £200k into a SIPP - I want to leave it there for around 5 years until I'm ready to buy an annuity - I'm not looking for growth, I just want to put it into a fixed income fund in order to keep it as safe as I can. Any thoughts on which company I should use to manage this? I want to keep my charges to a minimum - I was going to use Hargreaves Lansdown but at .45% this would be £900 per year for doing pretty much nothing. Selftrade looks a good option but I'd welcome any other thoughts thank you.

spexs wrote: »

Between leaving her part time job (2017) and drawing her state pension (2020) my wife will have three years where she will have approx £5000 unused tax personal allowances p.a. She has no private pension. My thinking is to put £12k net (£15k gross) into a SIPP and draw it out totally tax free over the three years where she has the free PA. My thoughts are to put the money into a purely cash fund within a SIPP to avoid market fluctuations as it's a relatively short term "investment". If my plan make sense can anyone recommend a SIPP fits the bill.

Thanks.

HL might be a good choice as there's no charge for a cash SIPP, though you'll get very little interest. See http://forums.moneysavingexpert.com/showthread.php?t=5397588

But keep an eye on the March budget as tax relief on pensions could change significantly.

I’m guessing this may be a silly question, and I’ve had a poke round here to see if anybody’s asked it already, but… I’m over 60, have £15k, which is just sitting in the bank, earning only a little interest.

Please don’t cringe too much if I’m being very naïve here, but my cousin tells me he has put his £10k into a SIPP with Hargreaves Lansdown. He doesn't invest it in anything – just lets the cash lie there. Apparently, the government adds 20% in tax relief – so, for doing absolutely nothing, my cousin now has £12k.

Life not being like that, what’s the catch please, so that I can make fun of him suitably?

Thanks

hogweed wrote: »

.... Please don’t cringe too much if I’m being very naïve here, but my cousin tells me he has put his £10k into a SIPP with Hargreaves Lansdown. He doesn't invest it in anything – just lets the cash lie there. Apparently, the government adds 20% in tax relief – so, for doing absolutely nothing, my cousin now has £12k....

Tax relief is, surely, 25% because tax is 20%. So your cousin should have £12.5k.

(the £10k had already been taxed, at 20%, so the £10k is 80% of what he had before tax, so he had 12.5k gross, taxed at 20%. Which left him with 10k net. Tax relief takes it back to 12.5k, which is, in effect, 25% back, on the net amount)