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  • FIRST POST
    • littlebw
    • By littlebw 6th Jul 17, 2:52 PM
    • 28Posts
    • 3Thanks
    littlebw
    Have I got this right r/e HL SIPP pension
    • #1
    • 6th Jul 17, 2:52 PM
    Have I got this right r/e HL SIPP pension 6th Jul 17 at 2:52 PM
    Right here is my situation

    Me - 53 disabled not getting ESA due to savings, getting DLA, getting a £100 a month pension from local government

    Wife - 46 working as a teachers assistant, 30 hours, earning £11,400 a year, paying minimum into government pension

    no dependable kids

    Now ive been playing on the tax credits website and if we both pay £2880 into a private pension then we will be able to claim tax credits

    I would be able to draw part of mine in 3 years whereas the wife in 9 years

    Should i open each of us an hl account and open a sipp? which one as i would rather them choose what to do as long as it isnt high risk

    was gonna open with with aviva but they have messed me about

    Does all this make sense and am i doing the correct thing?

    Many thanks for looking
Page 1
    • xylophone
    • By xylophone 6th Jul 17, 5:52 PM
    • 22,881 Posts
    • 13,241 Thanks
    xylophone
    • #2
    • 6th Jul 17, 5:52 PM
    • #2
    • 6th Jul 17, 5:52 PM
    Have both you and your wife checked your state pension situation to help with planning?

    https://www.gov.uk/check-state-pension

    A Sipp is just a wrapper - you choose the investments.
    • littlebw
    • By littlebw 6th Jul 17, 5:58 PM
    • 28 Posts
    • 3 Thanks
    littlebw
    • #3
    • 6th Jul 17, 5:58 PM
    • #3
    • 6th Jul 17, 5:58 PM
    Have both you and your wife checked your state pension situation to help with planning?

    https://www.gov.uk/check-state-pension

    A Sipp is just a wrapper - you choose the investments.
    Originally posted by xylophone
    yea we both will have full state pensions

    where can i put our £2880 then?
    • squirrelpie
    • By squirrelpie 6th Jul 17, 9:16 PM
    • 10 Posts
    • 2 Thanks
    squirrelpie
    • #4
    • 6th Jul 17, 9:16 PM
    • #4
    • 6th Jul 17, 9:16 PM
    Wait and see what Vanguard offer?
    • littlebw
    • By littlebw 7th Jul 17, 7:32 AM
    • 28 Posts
    • 3 Thanks
    littlebw
    • #5
    • 7th Jul 17, 7:32 AM
    • #5
    • 7th Jul 17, 7:32 AM
    Any recommendations please , i need to open 2 private pensions today
    • AnotherJoe
    • By AnotherJoe 7th Jul 17, 8:07 AM
    • 7,239 Posts
    • 7,752 Thanks
    AnotherJoe
    • #6
    • 7th Jul 17, 8:07 AM
    • #6
    • 7th Jul 17, 8:07 AM
    Why today ? It's not as if it's April 5th.

    HL are perfectly good provider,their charges can be high but for low sums of money such as yours they can actually work out quite low.

    if you want your money out in 3 years you could just keep yours as cash, you are still getting a 25% boost. For your wife what you invest in depends how risky you want to get, something like vanguard life strategy 40 might be a reasonable low to medium risk option.

    There are other providers out there but HL are easy to deal with and you might decide the extra (say) £50 a year you'd pay them over some other bare bones supplier is worth the hassle free experience. Or you might not in which case there are comparison sites available for different providers showing costs at different levels of investment. I do recall that HL come out very good at sums under £20k or so, if that helps, others here no doubt will chip in as well.
    • xylophone
    • By xylophone 7th Jul 17, 8:31 AM
    • 22,881 Posts
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    xylophone
    • #7
    • 7th Jul 17, 8:31 AM
    • #7
    • 7th Jul 17, 8:31 AM
    For a modest SIPP, HL's charges are not excessive.
    Their web site is second to none.
    Their administration is very efficient.
    • Joey Soap
    • By Joey Soap 7th Jul 17, 12:07 PM
    • 77 Posts
    • 18 Thanks
    Joey Soap
    • #8
    • 7th Jul 17, 12:07 PM
    • #8
    • 7th Jul 17, 12:07 PM
    For a modest SIPP, HL's charges are not excessive.
    Their web site is second to none.
    Their administration is very efficient.
    Originally posted by xylophone
    Either Cavendish or Close Brothers will do exactly the same as HL do. But they will do it for not quite half the price. 0.25% versus 0.45%. With no account at HL, their website is fully and freely open and everything works. The only thing you cannot do without an account is to buy or sell investments. I'm sorry, but anyone who thinks that cutting the running costs of a SIPP investment by almost 50% for maybe 30 or more years, is not important, then I question why they feel competent enough to run a SIPP portfolio at all.
    • xylophone
    • By xylophone 7th Jul 17, 2:45 PM
    • 22,881 Posts
    • 13,241 Thanks
    xylophone
    • #9
    • 7th Jul 17, 2:45 PM
    • #9
    • 7th Jul 17, 2:45 PM
    I'm sorry, but anyone who thinks that cutting the running costs of a SIPP investment by almost 50% for maybe 30 or more years,is not important
    Did I (or any other poster) say this?
    • Joey Soap
    • By Joey Soap 9th Jul 17, 8:44 AM
    • 77 Posts
    • 18 Thanks
    Joey Soap
    Well, up there ^^^^^ you said -
    For a modest SIPP, HL's charges are not excessive.
    If HL's 0.45% per year fee is not excessive, how do you describe Close Brothers or Cavendish charges which are almost half that amount? Do you think you are doing anyone a favour by suggesting they'd be OK at HL for the next 30 years, when they could reduce their SIPP annual running costs by nearly 50% for that period? And HL's website, good as it is, is entirely free for anyone to use with the exception of actually trading. Myself, I see no sense in using HL whatsoever.
    • justme111
    • By justme111 9th Jul 17, 9:03 AM
    • 2,791 Posts
    • 2,671 Thanks
    justme111
    Well, up there ^^^^^ you said -

    If HL's 0.45% per year fee is not excessive, how do you describe Close Brothers or Cavendish charges which are almost half that amount? Do you think you are doing anyone a favour by suggesting they'd be OK at HL for the next 30 years, when they could reduce their SIPP annual running costs by nearly 50% for that period? And HL's website, good as it is, is entirely free for anyone to use with the exception of actually trading. Myself, I see no sense in using HL whatsoever.
    Originally posted by Joey Soap
    OP was going to put 2880 into his pension. So 0.45% of it would less than £14 a year. While cheapest competitor's fee would be about £7. Saving £7 a year is hardly much to write home about and to justify your outrage at someone confirming it would be a good choice in present circumstances.
    • A_T
    • By A_T 9th Jul 17, 9:58 AM
    • 183 Posts
    • 85 Thanks
    A_T
    HL also have reduced charges on many leading funds e.g. CF Woodford Equity Income is reduced by 0.15%, CF Lindsell Train UK Equity 0.20%
    • EdSwippet
    • By EdSwippet 9th Jul 17, 10:42 AM
    • 545 Posts
    • 509 Thanks
    EdSwippet
    ... Saving £7 a year is hardly much to write home about and to justify your outrage ...
    Originally posted by justme111
    Well, to be fair, calling it £7/year understates the cumulative saving. The extra cost of Hargreaves Lansdown over Close Brothers or Cavendish would be 0.2%/year per contribution, plus growth. You can use this calculator to estimate the total effects.

    Assuming 6% growth and 0.5% underlying fund charge, if the OP puts £3600 (gross) into a SIPP each year for three years and then withdraws the lot he saves £35 in charges overall. If his wife does the same but for nine years she saves £383. Total is £418 saved.

    Hardly life-changing amounts, but still, why not pick the cheaper option? It would fund a nice weekend away for two in a decent B&B or hotel (or perhaps up to a week in an indecent one!). It is unlikely that any of the bells-and-whistles offered by Hargreaves Lansdown will be of any use to the OP.
    • xylophone
    • By xylophone 9th Jul 17, 11:26 AM
    • 22,881 Posts
    • 13,241 Thanks
    xylophone
    Do you think you are doing anyone a favour by suggesting they'd be OK at HL for the next 30 years,
    Was the poster suggesting this for himself or his wife?

    In the poster's case, using the maximum contribution for his circumstances, he could, for example, open the SIPP, (no charge) hold the contribution in cash (no charge), wait for the tax relief to be added (no charge), take the 25% tax free lump sum (no charge), take the balance (no charge provided that he is careful not to close the SIPP within the year).

    He could continue in a similar way while HL's fee structure remains the same.

    With regard to the spouse, although having earned income would permit her to contribute more, she too wishes to contribute only the £2880 and access the pension after nine years - this is still a very modest SIPP and I would be happy to consider HL for this on the basis of ease of administration and efficiency.

    Neither I not anybody else was suggesting that HL is the cheapest provider, only that they are efficient and have an excellent web site that is easy for a novice to use. See post 6.

    I have a fully retired relative who uses HL for his SIPP and finds them very satisfactory for this purpose.

    I moved my ISA from HL because the II charging structure makes it much cheaper for me to hold it with II.

    It is a case of horses for courses and it is up to the OP to do his research and decide accordingly.
    Last edited by xylophone; 09-07-2017 at 11:32 AM. Reason: typo
    • AnotherJoe
    • By AnotherJoe 10th Jul 17, 10:08 AM
    • 7,239 Posts
    • 7,752 Thanks
    AnotherJoe
    Well, to be fair, calling it £7/year understates the cumulative saving. The extra cost of Hargreaves Lansdown over Close Brothers or Cavendish would be 0.2%/year per contribution, plus growth. You can use this calculator to estimate the total effects.

    Assuming 6% growth and 0.5% underlying fund charge, if the OP puts £3600 (gross) into a SIPP each year for three years and then withdraws the lot he saves £35 in charges overall.
    Originally posted by EdSwippet
    Huge assumption because due to short timescale and low amounts of income, I'd advise him to stay in cash. In which case, he would save money compared to, AFAIK, any of the schemes you mention.
    • EdSwippet
    • By EdSwippet 10th Jul 17, 3:04 PM
    • 545 Posts
    • 509 Thanks
    EdSwippet
    Huge assumption because due to short timescale and low amounts of income, I'd advise him to stay in cash. In which case, he would save money compared to, AFAIK, any of the schemes you mention.
    Originally posted by AnotherJoe
    Indeed, for the OP. For his wife, not so much. Nine years (or more) is a decent enough period in which to hold some lower-risk investments, and a rather extended period over which to give up bank or building society interest.

    My main objection was to the statement than HL costs just £7/year more than the alternatives. The difference is much greater when more than one year's contributions are involved, and easily amounts to several hundred pounds over the period.
    • justme111
    • By justme111 10th Jul 17, 5:14 PM
    • 2,791 Posts
    • 2,671 Thanks
    justme111
    Indeed, for the OP. For his wife, not so much. Nine years (or more) is a decent enough period in which to hold some lower-risk investments, and a rather extended period over which to give up bank or building society interest.

    My main objection was to the statement than HL costs just £7/year more than the alternatives. The difference is much greater when more than one year's contributions are involved, and easily amounts to several hundred pounds over the period.
    Originally posted by EdSwippet
    OP wants to contribute this year to a pension to be entitled to some benefit. He would draw it in 3 years. What investments is his pension in and whether it is cash or not is not that relevant now and likely not going to be very relevant ever. He found a platform he feels ok about , he is a novice in it and not planning to amass fortune. Splitting hairs is likely to be counterproductive
    • AnotherJoe
    • By AnotherJoe 10th Jul 17, 5:55 PM
    • 7,239 Posts
    • 7,752 Thanks
    AnotherJoe
    Indeed, for the OP. For his wife, not so much. Nine years (or more) is a decent enough period in which to hold some lower-risk investments, and a rather extended period over which to give up bank or building society interest.

    My main objection was to the statement than HL costs just £7/year more than the alternatives. The difference is much greater when more than one year's contributions are involved, and easily amounts to several hundred pounds over the period.
    Originally posted by EdSwippet
    That again would depend what the investments were.
    • Alexland
    • By Alexland 10th Jul 17, 8:31 PM
    • 242 Posts
    • 124 Thanks
    Alexland
    If it's so urgent you don't have time to think then a Nutmeg SIPP is a good choice for a small regular investment. The charges are fair and the ETFs within their fixed portfolios are pretty mainstream. Most importantly there are no transaction or exit fees.
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