Warning re Stakeholders/Personal Pension vs SIPPS

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
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  • [Deleted User][Deleted User] Forumite
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    My sipp is with sippdeal and it is growing nicely under my own control. Having a sipp is not scary. I am knowledgable when it comes to stocks but there are dozens of funds to invest in as well as individual shares. The secret is to spread the money around so that there is exposure to a range of sectors. You can even invest in gilts and bonds within a sipp so the risk factor is up to you
  • dunstonhdunstonh Forumite
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    My sipp is with sippdeal and it is growing nicely under my own control. Having a sipp is not scary

    Of course its not scary. Its certainly more admin initially. Current timing to commence a SIPP may not be ideal with all the new version SIPPs coming out in the next 6 months.

    You are certainly right about the variety of sectors though. That being said, many can go that within a stakeholder or personal pension cheaper than they can within a SIPP.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • kittie wrote:
    My sipp is with sippdeal and it is growing nicely under my own control. Having a sipp is not scary. I am knowledgable when it comes to stocks but there are dozens of funds to invest in as well as individual shares. The secret is to spread the money around so that there is exposure to a range of sectors. You can even invest in gilts and bonds within a sipp so the risk factor is up to you

    Good for you! (I've just set up one of these with Sippdeal for a client on a fee basis (she's not as confident nor as knowledgeable as you when it comes to selecting the investment links).

    I see that you're considering several asset types within your SIPP investment, and that collectives are within your scope, too. I think you're right, although a number of people have recommended that all the money should be invested in stocks that are dividend-rich; this seems a little too restrictive for my liking.
    oceanblue is a Chartered Financial Planner.
    Anything posted is for discussion only. It should not be taken to represent financial advice. Different people have different needs, and what is right for one person may not be right for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser; he or she will be able to advise you after having found out more about your own circumstances.
  • PalPal Forumite
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    oceanblue wrote:
    ...I think you're right, although a number of people have recommended that all the money should be invested in stocks that are dividend-rich; this seems a little too restrictive for my liking.

    Not only restrictive, but likely to be fairly risky as well. The market values some stocks so that they have high HISTORICAL dividend yields for any number of reasons, many of them not good at all.

    LloydsTSB anyone?
  • cheerfulcatcheerfulcat Forumite
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    Hello oceanblue
    oceanblue wrote:
    I think you're right, although a number of people have recommended that all the money should be invested in stocks that are dividend-rich; this seems a little too restrictive for my liking.

    AFAIK there is only *one* person who makes that recommendation :-). I am an advocate of the High Yield Portfolio school of investing but IMHO a pension wrapper is not the place for it ( except perhaps for higher rate tax payers ) since in its pure form it involves buying and holding shares for ever ( so no CGT liability ) and reinvesting dividends, upon which tax has already been paid so no further liability there for a BR taxpayer.
  • EdInvestorEdInvestor
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    Pal wrote:
    LloydsTSB anyone?


    You'd better watch it Pal or you'll have to delete yourself ;):D

    Obviously how much of a SIPP is invested in equities (of whatever kind) is related to the individual's entire portfolio of assets.

    One wouldn't make an allocation for the SIPP on its own - it is just a tax wrapper, after all.
    Trying to keep it simple...;)
  • EdInvestorEdInvestor
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    Hi CC
    I am an advocate of the High Yield Portfolio school of investing but IMHO a pension wrapper is not the place for it ( except perhaps for higher rate tax payers ) since in its pure form it involves buying and holding shares for ever ( so no CGT liability ) and reinvesting dividends...


    Actually the HYP is meant to provide an income, reinvesting the divis for growth is a secondary aspect of it.As such it's a very suitable component for a pension fund in drawdown IMHO.Most drawdown funds are run from within a SIPP, as you know.

    With an HYP, the investor can see very clearly in an instant the state of his capital and the income it is earning. Thus if necessary adjustments can be made.This separation of capital and income is quite different from an investment bond, say, where people's so-called income may in fact be a withdrawal of capital without them realising, which can be very dangerous..
    Trying to keep it simple...;)
  • cheerfulcatcheerfulcat Forumite
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    EdInvestor wrote:
    Hi CC




    Actually the HYP is meant to provide an income, reinvesting the divis for growth is a secondary aspect of it.As such it's a very suitable component for a pension fund in drawdown IMHO.Most drawdown funds are run from within a SIPP, as you know.

    With an HYP, the investor can see very clearly in an instant the state of his capital and the income it is earning. Thus if necessary adjustments can be made.This separation of capital and income is quite different from an investment bond, say, where people's so-called income may in fact be a withdrawal of capital without them realising, which can be very dangerous..

    My point is that it would seem to be a waste of a perfectly good pension wrapper ( ISA or pension ) to put into it investments which would be free of further tax anyway.
  • [Deleted User][Deleted User] Forumite
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    MoneySaving Newbie
    Sipps can be dangerous if you go in blindly. If you are not confident then go with a good IFA
  • cheerfulcatcheerfulcat Forumite
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    kittie wrote:
    I`ll give you some examples of my investments within my isa wrapper I hold 17% in an aim stock which will not be giving any fireworks but is cash generative and will be paying a hefty dividend in 2007, incidentally this stock will be out of my IHT bracket after holding for two years

    Hi, kittie,

    Just one thing; you can't put AIM shares into an ISA unless they are listed on a recognised foreign exchange in which case the AIM tax breaks don't apply...
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