Warning re Stakeholders/Personal Pension vs SIPPS

Pal

An assumption on my part based on the enormous size of the investment fund industry in this country. Are you seriously suggesting that most people who currently have a personal pension would much rather be invested in self-selected individual stocks?

EdInvestor

I don't know Pal. Do you? It's only very recently been possible to invest a personal pension fund cost effectively in individual stocks. There are plenty of people invested in individual stocks outside pensions.

deemy2004

Investment trusts anybody ?

I mean - WOW - the Barings Eastern European is roaring ahead and so is the Fleming Indian

EdInvestor

PLus number of shareholders

1 - HBOS - 2,588,000
2 - BT GROUP - 1,604,000
3 - MM02 - 1,578,000
4 - NATIONAL GRID TRANSCO - 1,435,000
5 - BRADFORD & BINGLEY - 1,181,000
6 - CENTRICA - 1,160,000
7 - BG GROUP - 998,000
8 - LLOYDS TSB GROUP - 974,000
9 - FRIENDS PROVIDENT - 890,000
10 - BARCLAYS - 876,000
11 - AVIVA - 875,000
12 - ALLIANCE & LEICESTER - 699,000
13 - VODAFONE GROUP - 619,000
14 - INTERNATIONAL POWER - 560,000
15 - SCOTTISH POWER - 450,000
16 - SCOTTISH & SOUTHERN ENERGY - 447,000
17 - BAA - 382,000
18 - BP - 356,000
19 - ROLLS ROYCE GROUP - 319,000
20 - MARKS & SPENCER GROUP - 317,000


Moneysavers might like to compare this with the top 20 companies in the FTSE100. If you have any money in shares via a fund like an index tracker or a managed fund, then the majority of it will be invested in these shares:

BP
Royal Dutch(Shell)
HSBC
Vodaphone
GlaxoSmithKline (drugs)
Royal Bank of Scotland
AstraZeneca (drugs)
Barclays
HBoS
Lloyds
Tesco
Diageo (drinks)
British American Tobacco
Anglo American (mining)
BT Group
Rio Tinto (mining)
BHP Billiton (mining again)
National Grid Transco
BG Group


Rather a lot of banks in both, and a lot of utilities in the first one as well. The second has a lot of oil and gas and mining as well as banks.

Both of them would be improved IMHO from the risk point of view by more diversification. The top list will do better than the bottom on the whole because its companies pay a higher dividend yield.

wimbledonguy

I have a SIPP with Hargreave Landsdown (like a previous poster). Charges are not far of setting up and running ISA.

No initial charge and if you invest in unit trusts you get a discount off the usual 5% initial charge and pay only aroun 5%.

They have very efficient customer service.

If you are young take a few risks and put some of the fund in emerging econonies I have and so far in the last six months those investments have gone up by aroung 18%.

Pal

"pay only around 5%"?

Are you sure about that? That's very high.

whiteflag_3

Edit by Pal: Remove quote repeating advertising post that has been removed.

Thought adverts were prohibited on this site!

Paul_Herring

whiteflag wrote:

Thought adverts were prohibited on this site!

They are. Just reported it.

Pal

If you PM me in future I can delete or modify advertising posts. The proper mods are often too busy to get around to things like this.

Cheers

Pal - Pensions BoardGuide

NeilW

If you want to invest in funds (which most people do) you have more choices, and SIPPs are rarely the cheapest for fund investment as the annual and underlying fund charges are on top of the SIPP charges.


Fund charges are problematic because nobody ever links them to performance. I've spent a lot of time scratching my head over this and I can't work it out.

Currently the industry is obsessed with charges. However they express it in a peculiar way. Let me give you an example of a product, the Halifax Web Saver, but I'll express it in the same format that a Unit trust is described.

Halifax Web Saver.

Gross Yield 6.7% (the amount Halifax gets in from an unsecured loan).
Charges 2.05% per annum (the difference between the gross yield and net paid).

Clearly if the Halifax Web Saver was a Unit Trust it wouldn't be allowed in a stakeholder pension. Obviously it is a very risky product!

You can't decouple charges from performance, whatever the FSA might say.

NeilW