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AE Employer Contributions & SIPP's

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averageish
averageish Posts: 53 Forumite
in Auto-enrolment
I am hoping we have a pension expert who can give me a pointer regarding AE and SIPP's.

As I understand, if a member of staff wishes to opt out of auto-enrolment, they lose entitlement to employer contributions. The major providers of SIPPs, BestInvest, HL and so on, do not seem to offer a SIPP for individuals which are compliant with AE.

What should an employee do who wants to utilise a SIPP whilst continuing to receive employer contributions? Is it even possible and are there any brokers who offer such a product?

If anyone is able to help, I thank you in advance.

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  • dunstonh
    dunstonh Posts: 116,383 Forumite
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    The major providers of SIPPs, BestInvest, HL and so on, do not seem to offer a SIPP for individuals which are compliant with AE.

    You also become known as an opt-out. Many pension providers will not accept opt outs.
    The major providers of SIPPs, BestInvest, HL and so on, do not seem to offer a SIPP for individuals which are compliant with AE.

    I believe HL does. A number of other providers do too. Note, most of those are not major providers of SIPPs.
    What should an employee do who wants to utilise a SIPP whilst continuing to receive employer contributions? Is it even possible and are there any brokers who offer such a product?

    As an opt out, you would need to find a firm willing to overlook that and a provider willing to overlook that.

    it would be silly to do this unless the employer is willing to pay the equivalent amount into your SIPP. Most wont as they dont want the hassle of paying into multiple schemes.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • averageish
    averageish Posts: 53 Forumite
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    dunstonh wrote: »
    it would be silly to do this unless the employer is willing to pay the equivalent amount into your SIPP. Most wont as they dont want the hassle of paying into multiple schemes.

    They are in this case, so I'll have a chat with HL and a look around at other options.

    Many thanks for this information, it is very helpful.
  • jamesd
    jamesd Posts: 26,103 Forumite
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    averageish wrote: »
    What should an employee do who wants to utilise a SIPP whilst continuing to receive employer contributions?
    Two options:

    1. Ask about transfer out options from the employer's pension scheme choice. Then you can pay in and transfer out later.

    2. Hargreaves Lansdown is one firm that offers both auto-enrolment products and personal pensions and if your employer was to choose ot use them for auto-enrolment you could use this for both. They are far from the only ones doing this, with bigger firms in the SIPP market like Standard Life also offering auto-enrolment and SIPPs. A work pension with SL might offer the option of using their SIPP, though personally if I had the choice I'd transfer out rather than using it.
  • dunstonh
    dunstonh Posts: 116,383 Forumite
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    I suspect that the op will still be an opt out and it would be an individual scheme that would be set up and not an auto-enrolment scheme. Mainly as there is already an auto enrolment scheme in place.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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