Hargreaves Lansdown SIPP - how safe is my money

mountainbiker

Earlier this year I transferred all of my various pension schemes into a new SIPP managed by HL. In the unlikely event that HL should go to the wall (it appears anythign can happen in financial markets these days) is my money safe - i.e. although it is held by HL I assume that the underlying investments are safe/protected ?

Thanks

dunstonh

SIPPs dont get quite as much protection under the FSCS as personal pension/stakeholder pensions. SIPPs are treated as investments but personal pensions/stakeholder pensions are treated as life insurance investments.

However, in all cases where unit linked funds are used, it doesnt really matter as in most cases units are ringfenced away from the provider and held under a trust arrangement.

SIPPs utilising direct investments do get protection where applicable on the underlying direct investment if itself qualifies for protection. However, it is worth noting that just because the SIPP gets FSCS protection, it doesnt mean the investments you are in do. If you invest in investment with no FSCS protection and they fail for some reason, then you lose your money.

EdInvestor

Re cash in HL SIPPs, it spreads the deposits around 4 banks.

In theory each individual's cash deposits should be protected up to the 50k Givt limited, but there is some question over the nature of the accounts it is held in - for example if there is one big HL trustee account holding all clients cash at an individual bank, does only one guarantee apply - to HL - or one guarantee per each HL client.

Might be worth asking them that.

You are protected up to 48k on each investment (ie fund) if the fund manager goes bust.