SIPP, Hargreaves Lansdown and Funds

rorydog_2

Thought it was to good to be true.

Will follow this forum until I am fairly sure what I am doing.:T

jamesd

wellsie82, paying in monthly contributions to just the two or three you want to pay most into and then periodically selling some and buying the others with a sell and split into up to five parts will work fine. The normal online lump sum purchase limit is 1,000 but when selling some of one fund and buying others you can go much lower. HL will send out a letter for each purchase in the sell and buy so do try to be a little kind to them and try to buy 50 of each smaller fund at a time. So perhaps sell 250 of one big fund and buy 50 of five others once every six months. 50 is the value where they will normally reinvest dividends automatically so it's clear that they do consider that size to be acceptable.

rorydog, recycling is prohibited if the total of all lump sums is greater than 15,000 within 12 months and the recycling is more than 20% of the lump sums or the regular pension contributions are 20% more than expected, taking into account all other circumstances.

The 25% lump sum from just 20,000 of funds would be only 5,000 and this is under the threshold for the anti-recycling rules, so you are clearly permitted to recycle it if you wish.

Your house sale proceeds are also a clearly different source of funds that you could make a lump sum contribution with. You could even use that money to buy several pensions each of which would have a 25% lump sum under the threshold, then each year take the 25% lump sum from one of them and recycle that.

You should read the full rules and examples. The bonus, salary increase, windfall, inheritance and financial settlement examples in the rules make it entirely clear that your property sale proceeds will be an acceptable reason for increased contributions.

rorydog_2

jamesd wrote: »

wellsie82, paying in monthly contributions to just the two or three you want to pay most into and then periodically selling some and buying the others with a sell and split into up to five parts will work fine. The normal online lump sum purchase limit is 1,000 but when selling some of one fund and buying others you can go much lower. HL will send out a letter for each purchase in the sell and buy so do try to be a little kind to them and try to buy 50 of each smaller fund at a time. So perhaps sell 250 of one big fund and buy 50 of five others once every six months. 50 is the value where they will normally reinvest dividends automatically so it's clear that they do consider that size to be acceptable.

rorydog, recycling is prohibited if the total of all lump sums is greater than 15,000 within 12 months and the recycling is more than 20% of the lump sums or the regular pension contributions are 20% more than expected, taking into account all other circumstances.

The 25% lump sum from just 20,000 of funds would be only 5,000 and this is under the threshold for the anti-recycling rules, so you are clearly permitted to recycle it if you wish.

Your house sale proceeds are also a clearly different source of funds that you could make a lump sum contribution with. You could even use that money to buy several pensions each of which would have a 25% lump sum under the threshold, then each year take the 25% lump sum from one of them and recycle that.

You should read the full rules and examples. The bonus, salary increase, windfall, inheritance and financial settlement examples in the rules make it entirely clear that your property sale proceeds will be an acceptable reason for increased contributions.

That is very helpful news James.
Can you also point me in the right direction with the selection of SIPP provider bearing in mind that the pension will be mainly funds with a few shares. I doubt that there will be more activiting that 12 - 20 trades max a year. How easy the site is to use is another important factor.

wellsie82

jamesd wrote: »

wellsie82, paying in monthly contributions to just the two or three you want to pay most into and then periodically selling some and buying the others with a sell and split into up to five parts will work fine. The normal online lump sum purchase limit is 1,000 but when selling some of one fund and buying others you can go much lower. HL will send out a letter for each purchase in the sell and buy so do try to be a little kind to them and try to buy 50 of each smaller fund at a time. So perhaps sell 250 of one big fund and buy 50 of five others once every six months. 50 is the value where they will normally reinvest dividends automatically so it's clear that they do consider that size to be acceptable.

hi james

thanks for your comments on that, i never knew that they would go lower like that, the min per month per fund is £50 so that confirms what you said about the reinvestments of the divs

jamesd

rorydog, sorry, I don't know the SIPP market well enough to make good suggestions about a choice of provider.

pandhandj

looking for some constructive criticism -

I have £11K in a old company pension (i cant transfer it to my current pension, cant access it till I'm 55). I was thinking of transferring it to a H&L SIPP. Is this a reasonable idea at the moment, due to the flux in the markets? I've got almost 30 yrs till retirement.


If it is worthwhile going ahead i was thinking of splitting it as

50% H&L MM Income and Growth
25% India (Jupiter or First State)
25% ?

or is there a better idea that i haven’t yet considered

any comments gratefully worried over!

DrGUID

pandhandj: Sounds good although you need extreme discipline with a SIPP. Fortunately I can afford to lose mine as I also have a decent employer final salary scheme.

I can't give you any investing advice. But watch out for the fund charges on some of the HL funds, some are larger than others. Don't rule out the tracker funds either, they have low management charges. Also search for "EFT" and "iShares" stocks. There are all kinds of other investments you can put in a SIPP. iShares allow you to track all kinds of indices. EFTs allow you to invest in agriculture and commodities, but they've soared in value recently so it's a job to know if they're in a huge bubble or not.

My current SIPP:

25% Lloyds TSB
25% Bonds
25% Africa
25% cash

I'm waiting for further FTSE falls before I invest the rest of the cash.

dunstonh

HL MM funds are not that great in general so be wary there. You are paying around 3 times more in charges than a decent internal fund spread but not getting any performance improvement (historically).

Using a SIPP and putting the bulk in a MM is just a waste of money.

jamesd

DrGUID, it's a SIPP so why are you waiting instead of using say a short ETF to make some money while it drops? Might be more risk than you want, of course, but the potential is there... if it drops.

EdInvestor

rorydog wrote: »

Thought it was to good to be true.

Oops, had forgotten that your lump sum will be less than 15k, so no problem.Do remember though that you must pay tax on the pension, so unless your overall income is under 9k and thus tax free , the advantage to doing this isn't that great - and of course once in the pension, most of the money is stuck there forever.