SIPP, Hargreaves Lansdown and Funds

stphnstevey

butterfly72 wrote: »

JPM Natural resources 75% :eek:
.

I have this fund and just invested further in it this year - sorry can't help more, but just interesting to know others have chosen same fund.

Can I ask why you have put Eek! after it?

My 2p is with my little knowledge, natural resources seem to be fueling the world and in decreasing supply. So should fund should increase over the long term, particularly with third world development and growing demand for natural resources.

jamesd

Recent increases in natural resource prices seem related to concerns about inflation, with people buying physical goods that won't be affected. If inflation fears decrease then that could pop what might turn out to be a mini-bubble. In addition there's lots of expectation of near term growth in demand. If that doesn't happen then that could also produce a rapid drop in prices.

butterfly72

stphnstevey wrote: »

Can I ask why you have put Eek! after it?

Its because its high risk and it makes up 75% of my portfolio!! Well, actually I'm not sure you can call it a portfolio - it only contains two funds:rotfl:

Saying that, I do have some european funds with another provider (not HL) but I'm not counting them towards my pension pot. I've got other plans for them;)

Kez100

Any comments on these funds at the moment for a moderate risk with 15-20 years to retirement.

20% JPM US fund
10% Aberdeen emerging markets
10% Fidelity European
30% Artemis UK Special Sit
20% Blackrock UK absolute Alpha
10% Invesco Perpetual Corporate Bond

sabelu

Take the 20% tax free amount defer drawdown and keep investing as I do in the SIPP with the balance gaining interest still adding tax eficient amounts to the balance?

Whats thesmart thing to do to 'recycle'?

Start a second SIPP?

What flexibility or costs do I incurr through taking the 20%

jamesd

You can take 25% tax free lump sum. You're allowed to recycle up to £17,500 (1% of the lifetime allowance whatever that is, currently 1.75 million) and can do it for a spouse regardless of that. You can also continue previous contribution rates. You can recycle 20% of the lump sum if that's higher than these numbers.

Note that you should not plan to recycle. The anti-recycling rules only apply to those who plan in advance to recycle so if you don't plan it then in theory you're not affected by them, though proving it may be tough. In your case you're taking the lump sum now because you're approaching 50 and the age limit is increasing to 55 soon, so that's what is driving you to take the lump sum now, not any plan to recycle. Then, once you have the lump sum, you'd not plan to actually retire and could choose to put the money into a pension if you like.

I assume that HL will allow you to open a second SIPP to continue investing. Phone them and they will describe how this works with them.

Recycling reduces the lump sum you have as cash in hand. You take 25% then you can only take 25% of that 25% after the recycling. It's good if you want income, not so good if you want a lump sum. If your anticipated pension income in retirement is over 23k or so then you may find it better to have tax free income from ISAs rather than more taxable pension income, to avoid age allowance reduction. If the taxable income goes into higher rate the benefit of using the ISA increases further. In those cases taking the lump sum and moving the money into ISAs as fast as possible is the way to go.

You won't have to take the lump sum from all of the pension pot if you don't want to, though with the age increase from 50 to 55 in April 2010 it's likely that you will need to if you want to take benefits before you're 55. Don't do it before April 2010 and you cant take anything from the that portion before you're 55. So take benefits and the 25% lump sum but don't take an income from the bit that is in income drawdown is one way to go if you don't need the income yet.

If you did recyle the lump sum that would be tied up until you're 55, with no access to it, unless you took benefits on that portion before April 2010 as well. Not a problem to do it before April 2010, ask HL for details.

If you won't be using your full cash and S&S ISA allowances it's quite likely to be a good choice for you to take lump sum up to 20,400 to use two years worth of ISA allowance. Possibly more, anything up to five or more years can be more than worthwhile.

When no benefits are taken a pension is fully inheritable as a lump sum without tax. When benefits, including the tax free cash, have been taken then there's a tax charge of 35% if it's taken as a lump sum but none if it's used to buy annuities or put into drawdown by the recipient.

It's hard to be very specific because your anticipated income in retirement, need for income now, whether you plan to carry on working, at what approximate income and whether you need lump sums or income in retirement (or before retirement) more are some of the factors to consider.

But in general: if your greatest need is taxable income in retirement, take the lump sum and recycle it, taking the lump sum from the recycled contribution before April 2010 as well. Then either recycle another time or decide it's not worth it for the amount you can recycle and move on to using ISAs instead for the lump sum that remains.

greenflamingo_2

Hi all
Made redundant in Jan and thinking of transferring my pension to a SIPP. I trade regularly in shares and want to invest in my own choice individual shares. Now I think would be a good time to invest. I asked for a statement with a view to transferring my pension and it states "Protected Rights included in total transfer value" - £20K, total transfer value of benefits £93K.

There is a personal pension transfer declaration form which I assume the new provider has to complete.

Would Squaredeal or SIPPextra accept pensions with "Protected Rights"?
I would want to see all my transactions and charges and the dealing fees would have to be reasonable.

greenflamingo_2

Just looked at the actuary;s letter and it is saying "If you will be transferring to a personal pension scheme, stakeholder pension scheme or other individual pensions arrangement, please would you ask your adviser to:

- confirm that the transfer will be made on the adviser's agency and
- provide **** with the advisers SIB/FSA agency number

I havent got an adviser and am loath to shell out £2K for advice when I have strong ideas on what I am going to do. Dont mind paying £1K but £2K no way!

Does this mean therefore that a person coming out of their employers scheme cannot transfer over to one of the above without having to pay someone for professional advice?

dunstonh

Does this mean therefore that a person coming out of their employers scheme cannot transfer over to one of the above without having to pay someone for professional advice?

Correct. Statistically, most final salary schemes are best left where they are. The FSA consider it a high risk transaction and twice in the last 18 months they have said that they would also consider direct applications as a mis-sale unless proven otherwise. This is despite no advice being sought or given. This is due to the statistically high odds of people making mistakes.

greenflamingo_2

Thanks for your advice - I have messaged you so hope you dont mind.

Regards