ISAs Vs SIPPs

moneyexpertiwish

Hello,

I have just opened a S&S ISA for the first time with Hargreaves Lansdown and deposited £20 to get it open.

I've not put my funds into anything yet as I thought they would give you a simple option of high/med/low risk funds but it looks like I need to pick my own funds.

Can anyone give me a recommendation on funds or ones to look at or perhaps a link that gives good information on funds.

I intend on buying some more RBS shares within my ISA wrapper as I have some now but not in an ISA.

BTW £20 was only to get it open so I am planning on putting in more!


I've also read a bit about SIPPs and how the government add the eqivilent of 20% of your desired amount. I've also read that SIPPs generally have quite high fees etc. I'm also put off by the fact you can't take funds out until you are 55 (50 til 2010). Although the benefit that might come in for me is that I won't be able to withdraw it if I start!

Does anyone have any experience on SIPPs that they could share?

Thanks

barny_100

I thought minimum investments were £1000 lump sum or £50 per month, they were when I signed up the other week!

As for funds do a search on the forum for Unit Trusts, OEIC, S&S ISA etc and you'll find plenty of tips for good research websites such a Trustnet, H&L's website, Morning star, iii etc

Reaper

Read about SIPPs on the main site by clicking here.

However SIPPs require hard work on your part to choose funds and keep moving them as you see fit. Since you say you would prefer just to pick from a smaller range of funds based on risk a stakeholder pension sounds more suitable and is cheaper too.

Read about SIPPs vs Stakeholder pensions in this article on the main site.

PS As for your S&S ISA, one option is to choose a "Multi Manager Fund". That means they choose which funds to put your money in for you and switch them if they feel the need. However be aware the charges tend to be higher. You can see the HL multi-manager funds here.

dunstonh

Can anyone give me a recommendation on funds or ones to look at or perhaps a link that gives good information on funds.

Board rules prevent recommendations on regulated investments. Especially fund/stock recommendations.

A good source for data research is Trustnet. Its free and is a cut down version of the IFA/investment managers version. Obviously, you would need to understand the data. So, make sure you learn what the things mean.

I've also read a bit about SIPPs and how the government add the eqivilent of 20% of your desired amount. I've also read that SIPPs generally have quite high fees etc. I'm also put off by the fact you can't take funds out until you are 55 (50 til 2010). Although the benefit that might come in for me is that I won't be able to withdraw it if I start!

SIPPs are designed for the experienced investor who wants a wider range of investment options than the stakeholder pension and personal pension (stakeholder is the simple option but limited and often low qualify investment options. Personal pension is the middle ground. Typically 100-1900 funds available. SIPP has almost unlimited investment options).

SIPPs are the most expensive option when it comes to buying investment funds. However, if you utilise the features and options of a SIPP then it is quite justifiable as you making use of the things you are paying extra for. However, if you dont use those features then its a waste of money and a SHP or PPP is better.

One other thing to note is that SIPPs are fashionable. The media have over promoted them (often because their advertisers are SIPP providers). You see a lot of false comments and SPIN regarding them. Things like "low cost SIPP" are still more expensive than full cost stakeholder. SIPPs are far more profitable to providers than the stakeholder and most modern personal pensions.

guli

HI dunstonh, Can you kindly define what are the features and options of a SIPP that a stakeholder pension and personal pension does not have, besides the obvious, which is a much wider selection of funds, including ETF, UT, IT, Forex and the ability to put individual shares into it? Thanks

dunstonh wrote: »

Board rules prevent recommendations on regulated investments. Especially fund/stock recommendations.

A good source for data research is Trustnet. Its free and is a cut down version of the IFA/investment managers version. Obviously, you would need to understand the data. So, make sure you learn what the things mean.



SIPPs are designed for the experienced investor who wants a wider range of investment options than the stakeholder pension and personal pension (stakeholder is the simple option but limited and often low qualify investment options. Personal pension is the middle ground. Typically 100-1900 funds available. SIPP has almost unlimited investment options).

SIPPs are the most expensive option when it comes to buying investment funds. However, if you utilise the features and options of a SIPP then it is quite justifiable as you making use of the things you are paying extra for. However, if you dont use those features then its a waste of money and a SHP or PPP is better.

One other thing to note is that SIPPs are fashionable. The media have over promoted them (often because their advertisers are SIPP providers). You see a lot of false comments and SPIN regarding them. Things like "low cost SIPP" are still more expensive than full cost stakeholder. SIPPs are far more profitable to providers than the stakeholder and most modern personal pensions.